Nokian Using Russian Capacity in Difficult Market Conditions

Nokian’s decision to reduce its Finland-based tyre production output from 6 million to 4.5 million tyres will be coupled with increased Russian capacity, financial analysts have reported. According to a recent Deutsche Bank report, “[Although] current demand is smaller than Nokian’s capacity…Nokian is reacting quickly by reducing capacity in order to maintain a high proportion of high priced products.”

In addition Deutsche Bank pointed out that the recent reduction of raw material costs the company’s savings target of 30 million euros in 2009 mean the company is will positioned in terms of future profitability.

“We continue to believe Nokian is able to generate a group margin exceeding 20 per cent in the 2009-2010 financial year,” the analysts concluded.