May figures show continued downward trend in Europe

Market figures released by Pirelli yesterday show Europe continues to be at home to lackluster tyre sales. According to the Italian manufacturer’s data, original equipment passenger car tyre market volumes in May 2012 declined 13 per cent year-on-year, while the replacement segment experienced a ten per cent year-on-year drop. Year to date, volumes in the original equipment and replacement markets have declined seven per cent and 13 per cent respectively. Pirelli’s May figures support data released by Michelin on 13 June; the French tyre maker reported that Europe’s original equipment passenger car tyre market sank 12.2 per cent during May, while the replacement market declined 6.8 per cent.

Europe’s truck tyre sector was a similar story. Pirelli’s information indicates the region’s original equipment and replacement markets declined 12 per cent and 28 per cent year-on-year respectively in May, leading to year to date drops of eight and 30 per cent. Michelin reported the European truck tyre market as declining by 7.9 per cent for the original equipment segment in May 2012, and 25.8 per cent for the replacement market.

These results are in line with Morgan Stanley’s findings after a visit to the Reifen show in Germany earlier this month. The financial services company reported seeing “no signs of recovery for European volumes” and noted it sees “risks to our forecasts of -2.5 per cent and -7 per cent for FY12 car and truck aftermarket volumes.” It added that “pricing appears to be cracking at the low-end of the market, pushed down by ‘selective discounting’ by price leaders. Premium volumes and pricing are still holding up well thanks to structurally growing demand versus limited supply.”