Dollar toll on Michelin sales

By Patrick Raleigh, ERJ On-line news editor

Clermont-Ferrand, France-Groupe Michelin's efforts to grow sales last year were offset by the strength of the Euro against the dollar. Net turnover came in at Euro15 400 million, 1.8-percent lower than is 2002, Michelin reported 12 Feb.

Currency factors knocked Euro1303 million (8.3 percent) off net sales last year cancelling out gains on higher volumes (3.3 percent), product mix (1.6 percent) and the consolidation of the Viborg tyre distribution business (2.1percent). The weaker dollar impacted Michelin sales outside of Europe, which account for around 50 percent of its turnover overall.

In Europe, Michelin's unit sales to the passenger car & light truck market rose 5.1 percent in the replacement sector, while equivalent OE sales fell by 11.2 percent. This compared to growth of 5.4 percent and a decline of just 3.6 percent, respectively, in the overall European markets for replacement and OE tyres to the passenger car & light truck sector.

Michelin linked its underperformance in part to its failure to meet higher-than-expected demand for its new Alpin tyre range, especially in eastern Europe.

The French group, meanwhile, reported that it has stabilised its market position in the European OE sector, following its decision to stop supplying General Motors since August, 2002. The group based this view partly on a market share gain in the fourth quarter of 2003.

Michelin fared slightly better in the European truck tyre sector, where it advanced unit sales of replacement tyre by 3.6 percent, compared to growth of just 2.3 percent for the replacement market overall. But the group again disappointed in the OE sector, with virtually flat unit sales against a 2.8-percent increase for the European OE market overall.