Michelin reaffirms 8% 2011 sales growth

Michelin’s third quarter financial report for 2011 has shown total net sales of 5.1 billion euros and nine-month total sales of 15.2 billion euros, figures that represent positive changes of 10.6 per cent and 17.3 per cent for their respective periods. Sales volumes were up 9.3 per cent, allowing the French giant to proclaim its results “solid” and to reaffirm “that growth in sales volumes should trend towards eight per cent by year end.” The company noted the “slower momentum” of the third quarter, particularly noticeable in the passenger car and light truck tyres segment, which was up only 5.9 per cent to 2.7 billion euros in the quarter. Michelin also said its “pricing policy added 10 per cent to nine-month sales growth”, offsetting “the full-year impact of higher raw materials costs”.

In its segmented review of the markets, Michelin noted that passenger car and light truck original equipment and replacement markets continued to rise in Europe – both up eight per cent in nine-month figures and up six per cent in the quarter – on the back of premium and export vehicle fittings rising, and strong dealer demand for winter tyres, particularly in Russia.

Reinstated government support for car demand in China helped the OE market rise five per cent, while across Asia (excluding India) replacement markets saw the most significant growth of nine per cent for the quarter (21 per cent in China). Japan’s automakers cut back on production following the tsunami, but the country’s used sales rose by 11 per cent as a result of the natural disaster’s destruction of cars, helping lift the replacement tyre market as a result of the custom of fitting new tyres to used cars. North American auto sales saw an upturn, helping OE sales to a 9 per cent rise, while South America witnessed solid growth across the segments.

In radial truck tyres, demand across OE segments in Europe, North and South America and Africa, India and the Middle East continued to grow, though the European OE market slowed through lower truck-maker confidence and a decline in orders. Asia’s tighter credit this year led to a one per cent drop in the quarter, while the nine-month figures are down eight per cent.

Meanwhile in replacement truck radial markets demand in Europe turned downwards in July, with the exception of Russia, where there is increased demand for steel radial technology. Michelin says the North American tyre market has moved back in line with long-term trends, while China rose modestly by two per cent. Japanese demand rebounded by 30 per cent following the slower post-tsunami market. Demand in South America slowed in the third quarter as dealer inventory declined after a very buoyant first half. Protectionism dented the upward trend in imports from earlier in the year on the back of improved exchange rates.

In speciality tyres, global demand in EMOTR and agricultural segments continued to expand in OE and replacement markets, while two-wheel tyres began to show signs of “levelling off”. Michelin said demand for its aircraft tyres was “still expanding”.

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