Analysts: OTR Tyre Markets Remain Strong

The US credit crunch may have caused turmoil in global financial markets, but, according to Deutsche Bank analysts, the OTR tyre segment at least continues to go in the “right direction.” As a consequence of continuing high raw material prices, strong demand remains for Earthmover tyres, particularly premium brand products. According to the analysts, Michelin is planning to increase its OTR production capacity by 25 per annum over the next 4 years, and their current projections suggest that the current shortage will remain until 2012. In 2007, this business generated revenues of 1 billion euros (or 6 per cent of Michelin’s total sales). EBIT margins in this segment are reported to be approximately 35 per cent.