TIA Help Hurricane Recovery
The Tire Industry Association (TIA) has announced that it will offer resource assistance to its members in Florida, South Carolina and Georgia who were affected by Hurricanes Charley and Frances.
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Chinese Car Sales Slow
Chinese car sales growth has slowed considerably. In the first quarter of this year car sales grew 44 per cent, in the second quarter they grew 22 per cent. By July sales growth slowed down to four per cent and now the booming sales figures appears to be stabilising as sales only increased by 0.1 per cent in August. The Chinese market will continue to be a force to be reckoned with, not simply due the country’s large population but also because year-to-date the automotive sales have grown by 21 per cent. Analysts are forecasting that the numbers will be similarly weak in the fourth quarter of this year.
Increased Productivity will Lead to Job Cuts, says Report
A new report published by industry analysts, Plimsoll Publishing, identifies 22 companies whose efficiency could have an impact on the rest of the industry.
US Tyre Demand to Increase by 4.1 per cent
The Rubber Manufacturers Association (RMA) has said that it expects demand for tyres to increase by 4.1 per cent in the US. The growth is attributed mainly to “broad-based economic growth in the consumer and commercial sectors.” According to the association, this growth is expected to continue over the next few years inline with the US economy’s moderate growth pattern. Overall, the combined original equipment (OE) and replacement shipments for both the car and truck categories are anticipated to increase by 12.6 million units to nearly 323 million units. In 2003 it amounted to 310.3 million. The association is projecting that this figure will reach 356 million units by 2009.
Analysts Applaud Michelin Deal
The recent cost cutting agreement signed by Michelin and USWA is a “significant achievement,” according to Deutsche Bank analysts.
Continental and Renault Share Prices Boom
Continental’s shares prices reached historically high levels last week. The influential automotive supplier’s impressive share prices are attributed to the company’s strong first half earnings, which have increased 46 per cent at the operating level.
At the same time French car manufacturer, Renault, has achieved a similarly impressive share price. According to analysts, the results are due to the car manufacturer’s Megane II and the recently launched Modus model.
Good News for Goodyear Shares
There was good news for Goodyear Tire & Rubber on Wednesday, as its shares closed at a 52-week high thanks to analysts recommending its stock.
The shares closed at $11.42, and were up 44 cents which meant the company’s stock has not closed below its 10-week moving average since late May.
Last month the manufacturer ended a six-quarter losing streak by posting a second quarter profit of $25.1 million, which equated to 14 cents a share, this figure compared with a loss of $53 million, or 30 cents per share, recorded in 2003.
China Leads the Global Bus Business
Although western European bus manufacturing is still the driving force in the global bus business, China is now ahead on volume according to the latest news published by Truck & Bus Builder Reports Limited. Analysts believe that the Chinese manufacturing pace has quickened because they are now using European standards for bus building and operation.
The report also claims that in India, the two leading domestic bus makers, Tata and Ashok Leyland, are involved in a Government-led transport programme, which “could transform the whole of the Indian sub-continent in terms of public transport.” The report details production and registration data for the main bus building countries and carries market forecast figures for the next five years.
Michelin Suggests Sharp Kerb Caused Blowout
Only a matter of days after Michelin said it will launch an enquiry into the events of the Belgian Grand Prix, the F1 tyre supplier has suggested a reason why its tyres appeared to fail.
Japanese Auto Sales
Global Automotive Daily has published the Japanese auto sales for August, stating that a 2.1 per cent increase in vehicle sales has ended the market’s six month consecutive decline. Mini vehicle sales were also up by 2.6 per cent which continued nine months of growth. Analysts say that the vehicle recovery is mainly due to a low of comparison base, as August 2003 was down by 2.6 per cent, and growth of the big players like Toyota and Honda.
US Sales and Production Expectations
Analysts expect August’s US light vehicle sales to reach 17.5 million units compared with 17.2 million from July and 19 million from last August. They predict that Chrysler’s sales will increase by three per cent, however GM’s and Ford’s are expected to decrease by one and five per cent respectively. Investors will be focusing on both GM’s and Ford’s fourth quarter results where they are expecting production to be down by 2.4 and 7.8 per cent respectively.
Fire at Bridgestone has Minimal Impact
Operations at Bridgestone’s Amagi plant have resumed after a fire, which burned for two hours, was put out last Friday. As a result of the fire, and the resultant clean-up operation, the Amagi factory had been closed for five days. The financial implications of the fire have been described by analysts as minimal due to the company’s strong “earnings momentum.” The same Deutsche Bank analysts have predicted that the financial impact, in terms of operating profit, will at most approach 2 billion yen (£10 million).
Bridgestone Forecasts ‘Overly Pessimistic’
According to Deutsche Bank, Bridgetone’s second half forecasts are overly pessimistic. The company’s projections are also said to assume low production volume and reflect an overly negative “cost-push scenario.” Instead Bridgestone’s strong first half results, which include an increase in turnover of 4 per cent and 29 per cent improvement in the companies operating income, have led analysts to project a more positive outlook and to affirm their advice to buy these shares.
Goodyear Results ‘Deflate’ Analysts
Goodyear may have been in profit for the second quarter and may have posted record sales but not everyone is impressed. Deutsche Bank analysts have pointed out a number of flaws in the company’s optimism.
Conti is Becoming Analysts‘ Favourite
Continental’s recently published and extremly favourable half-year business results seem to have fired the imagination of analysts. After the German tyre manufacturer announced 9.9 per cent increase in turnover and a 21.4 per cent increase in EBIT, half a dozen company and market reports have been published arguing that Continental shares still have considerable development potential.
