European Winter Tyre Slump May Continue in 2008

According to Deutsche Bank’s Equity Research Automotive Group, the dismal year for winter tyres experienced by our German neighbours may well be repeated in 2008. The winter tyre market represents 55 million units, 20 per cent of Europe’s replacement market. Half of these high margin products are sold in Germany, and in 2007 the winter tyre market decreased by 15 per cent, and by a substantial 30 per cent in the fourth quarter alone. As a result, winter tyre pricing is reported to be negative, and both manufacturers and dealers retain substantial stock levels in inventory. This situation is perhaps of particular concern to Germany’s Continental tyre, for which winter tyres represent approximately 17 per cent of passenger car tyre sales.