Michelin announced sales of 4.9 billion euros in the first quarter of 2013. Demand for car and light truck tires was weak in the European market, and demand in North America was also disappointing, but the group is exploring new markets.
Truck tires
The European market remained weak, with the number of trucks registered in Western Europe falling and the combined demand from Eastern Europe buoying, the European market decreased by 3%.
The North American market continued to slow down significantly, losing 12% of new truck orders during this period, weighed down by economic and tax uncertainty, especially in the category 8 market segment.
Demand in Asia (excluding India) rose by 5%, of which China’s rose by 8%, while Japan’s dropped by 14%, and Southeast Asia maintained strong growth (up 29%).
Compared with the first quarter of 2012, the original tire market in South America quickly rebounded by 23%. At that time, demand was weakened because Brazil introduced the Euro V emission standard.
Replacement tire
In Europe, the demand for replacement tyres has risen by 5% overall. Transport activity in Western Europe remained weak, but remained at a low level (1% increase), while in Eastern Europe, the market continued to rise by 24%.
The North American market rebounded slightly by 1%, mainly due to the demand from the United States. Although the US freight business maintained a weak upward trend, the number of tires needed for retreading tires was decreasing.
The Asian market (excluding India) decreased by 5% overall. During the Spring Festival, China’s demand slowed, and afterwards, the market improved in March, falling by 6% as of the end of the quarter. The Japanese market fell by 2% due to the tightening of dealer stocks, while the market in South Korea was also down by 4% due to the slowdown in transportation activities.
In the context of a more favorable economic environment, the overall demand in the South American market has increased by 5%, and the situation of out-of-stock has increased. As a result, the tariff barriers in the entire region have become loose, resulting in an increase in demand in this market.
Special tires
Construction Machinery Tire: As the mining industry is continuously expanding, it maintains the demand for large radial tires. Constrained by economic uncertainties and dealers' concerns, the sharp decline in the market for original tyres in Europe and North America, as well as the demand for tyres for infrastructure and quarries in mature markets, is also shrinking.
Agricultural tyres: The global market for original tyres declined in the first quarter but remained strong. The demand for technical tires is on the rise, but the demand for replacement tires in mature markets has declined slightly.
Two-wheeled tires: The motorcycle market in mature markets has been falling for the second consecutive year. In Europe, economic uncertainty and weather conditions are affecting dealers' purchase decisions.
Aircraft tires: The civil aviation market rose slightly during this period, while the demand for the national defense market was weakened by the government's budget.
Car and passenger car tires and related distribution business
Compared to 1.604 billion Euros in the same period of last year, net sales for the first quarter of 2013 amounted to 1.477 billion Euros.
Although sales fell by 5.6% year-on-year, sales rose slightly in the quarter compared to the previous quarter, reflecting the company’s emphasis on reversing and restoring the truck tire business for profitability.
Net sales are also affected by the overall decline in sales caused by the global economic environment, especially in Europe.
Card and passenger car tires and corresponding distribution businesses are also affected to a lesser degree by adverse currency effects.
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