Michelin gears up for tough market conditions

Clermont-Ferrand, France – Michelin’s 2014 financial year was defined by sluggish markets, except in North America and China, weaker demand for passenger car, light truck and truck tires, in the winter segments in Europe, and for OE in the new markets, except for China.

Last year also saw a decline in the agricultural and mining sectors, softened by a recovery in the OE and infrastructure market in the earthmover tire segment,the French group added in its report for the financial year ended 31 Dec.

The market challenges curbed Michelin’s 2014 sales and earnings, which came in at €19,553 million and €2,170 million, respectively – down from €20,247 million and €2,234 in the previous fiscal year.

Looking forward, Michelin predicted that demand in 2015 for passenger car, light Truck and truck tires would continue to grow in North America and China, and also in Europe albeit at a modest rate.

Mining tire customers, it added, were likely to make further inventory drawdowns and OE sales in the agricultural tire segment are expected to be lower. The earthmover segment, OE and infrastructure business should continue to grow at a modest rate.

“This year, we will focus on stepping up our growth drivers, including the launch of new Michelin brand ranges and a revamped line-up of our other brands, a significant improvement in the quality of our customer service, and more assertive distribution," said Michelin CEO Jean-Dominique Senard.

“The competitiveness plan will also be accelerated and now aims to achieve cumulative savings of €1,200 million over the period 2012-2016, versus €1,000 million previously," the Michelin boss added.