Michelin reports strong first quarter

By Patrick Raleigh ERJ On-line news editor

Clermont Ferrand, France-Groupe Michelin has posted a 3.9-percent year-on-year sales rise to Euro3799 million, helped by 7.6 percent higher tonnage volumes. Excluding exchange rate factors, the increase was 9.5 percent in what the group described as “better than expected tyre” markets.

However, Michelin put much of the sales growth down to one-off factors most notably advance purchases in anticipation of price increases by several tyre makers in Europe and North America.

In particular, the French market grew very strongly ahead of the implementation of the end-of-life tyre disposal legislation, said a 26 April Michelin press statement.

On 1 March France launched a producer-funded tyre disposal scheme, which is operated through a joint company, Aliapur. To finance the scheme, the tyre makers increased their French prices, which led to advance buying prior to 1 March.

Consequently, French replacement sales of passenger car & light truck tyres and truck tyres to grow by 10 percent and 24 percent, respectively, in the first quarter, Michelin said.

A recovery of the North American market from the low base of a difficult first quarter 2003 also drove up sales, the French group noted.

Excluding these exceptional factors, Michelin said tyre markets posted “somewhat better” growth than previously anticipated. This included a 17 percent increase in passenger car and light truck tyre sales in central and eastern Europe, which account for 10 percent of the total European market.