Michelin – European tyre volumes down in H1 2019

Weaker demand from vehicle manufacturers put the brakes on Michelin’s business in Europe in the first half of 2019. The company attributes the slackening of original equipment demand to a number of factors.

Passenger car & light truck tyres

Michelin delivered six per cent fewer passenger car and light truck tyres to OEMs in Europe (including Russia & CIS) in the first six months of the year than in the first half of 2018. This negative trend was more pronounced in the second quarter, with Michelin’s original equipment business in the region contracting eight per cent year-on-year in the three months to 30 June 2019.

Original equipment volumes were partially pushed down by issues linked to the rollout of WLTP standards. Other factors influencing volumes included the economic crisis in Turkey, a slowing Chinese economy and escalating trade tensions between Europe and the USA. The development of original equipment car/light commercial tyre volumes in the first half of 2019 also shows a distinct East-West divide – Michelin reports a five per cent rise in original equipment demand in Eastern Europe during the first half of the year.

The East-West divide was also seen in the region’s replacement market. Although volumes for aftermarket car and light truck tyres were two per cent lower year-on-year in Europe as a whole for the first half of the year, they grew one per cent in Eastern Europe; the four per cent decline seen there in the first quarter due to softer demand in Russia gave way to a seven per cent increase in the second as the Russian market rebounded. Issues weighing upon replacement market demand included the economic crisis in Turkey, inventory drawdowns in Germany as well as high dealer inventories in France and Spain.

Truck tyres

Volumes of original equipment truck tyres in Europe (including Russia & CIS) were four per cent down in the first half of the year. The decline was much steeper in the second quarter, with a 19 per cent fall-off in Germany helping OE truck tyre volumes to plunge eight per cent year-on-year. In Eastern Europe, a one per cent volume growth during the second quarter was unable to compensate for the 11 per cent drop experienced in the first; as a result, H1 2019 original equipment truck tyre volumes there were down four per cent year-on-year.

European demand for replacement truck tyres declined one per cent during the first half of 2019. The economic crisis in Turkey again contributed to lower volumes, however, volumes in the first quarter couldn’t match the atypically strong volumes in Q1 2018 that were driven by early buying ahead of the introduction of anti-dumping measures in May. Aftermarket truck tyre volumes increased by two per cent year-on-year in the second quarter of 2019.

Specialty tyres

While volumes of both original equipment and replacement agricultural and construction tyres were lower in Europe during H1 2019 thanks to the economic crisis in Turkey, motorcycle and scooter tyre markets enjoyed further growth in the region.