Markets still expanding, despite slow momentum says Michelin

ERJ staff report (LMH)

Paris -Michelin's markets are still expanding, despite slower momentum in the third quarter, the French tyre manufacturer said in its 26 Oct financial report. Third quarter sales at Michelin are up 10.6 percent at Euro 5141 million, For the nine months ended 30 Sept 2011, sales are up 17.3 percent, totalling Euro 15 246 million.

The greatest sales increases are in the company's speciality tyres, including earthmover, agricultural and aircraft tyres, which saw an increase of 24 percent in the third quarter (Euro 748 million) and a 32.3-percent increase for the year-to-date (Euro 2335 million). Michelin said OE (original equipment) demand for earthmover tyres continued to expand quickly in mature markets. Both aircraft and agricultural tyres are seeing an increase in demand. Two-wheel tyres' are still trending upwards, Michelin said, but are showing signs of levelling off.

In truck tyres, sales in the third quarter reached Euro 1729 million (+13%) and for the year-to-date totalled Euro 1995 million (+22%). Michelin said the European OE market slowed in the third quarter, while demand in North America continued to rise sharply. Demand also weakened in Asia. In the replacement tyre business, demand in Europe turned downward in July although the Russian market remains buoyant. The Asian market expanded modestly by 2 percent and Japanese demand rebounded by 30 percent after the March earthquake-related slowdown.

In passenger car and light truck tyres, Q3 sales totalled Euro 2664 million (+5.9%) while sales for the first nine months of 2011 were Euro 7916 million (+10.9%). Michelin noted that OE tyre markets continued to expand in Europe with demand for premium and export vehicle fittings rising at a faster pace. The French tyre maker also said that in Asia (excluding India), the Chinese OE market rose by 5 percent in the third quarter and has returned to stronger growth with the reinstatement of government programmes to support automobile demand. Demand for replacement tyres has remained “very vigorous” in Russia.

Michelin said growth in the passenger car and light truck business will depend of winter tyre sales to end customers, while the truck tyre market is expected to remain uncertain particularly in Europe. Speciality markets are expected to stay “very buoyant.”

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Press release from Michelin