Frankfurt, Germany – The German tire & rubber goods manufacturing industry experienced a 0.7% dip in sales to just under €6 billion in the first half of 2018, the WDK has reported.
The Frankfurt-based industry association linked the year-on-year decline to falling vehicle production in Germany, and significantly lower tire sales particular to domestic vehicle manufacturers.
The negative trend offset a positive, export-led performance in the technical elastomer products (TEE and TPE) sector, according to a recent WDK analysis.
"Domestically, rising production volumes in mechanical engineering, electrical engineering and construction helped to boost sales of technical elastomer products,” said WDK chief economist Michael Berthel.
On the other hand, Berthel noted that declining vehicle-production had also “left its mark” on the automotive supply sector.
In the tire after-sales business with end users, both unit sales and mid-year sales were down on the previous year – WDL linking this to a delayed start of the conversion season and a shift to all-season tires.
Overall, the tire business saw a decline in sales of 5.7%, to almost €2.5 billion. And, although a slight catching-up process has recently begun, Berthel reckoned that full-year 2018 sales are unlikely to match prior-year levels.
Another issue is that medium-sized companies in the German rubber industry are increasingly facing capacity limits mainly due to shortages of manpower, continued the WDK chief economist.
Moreover, Berthel said, reduced international competitiveness, due to rising energy and personnel costs, is limiting worthwhile domestic investment.
For full-year 2018, he cautioned that “the current strong external demand [could] weaken significantly in the face of intensified international trade relations, the effects of Brexit and the weakness of some major trading partners such as Turkey.”
Growth in sales of TEE and TPE is, therefore, likely to slip below the current level of plus 3% by the yearend, said Berthel, who concluded: "Overall, only a small increase in sales in the German rubber industry is expected for 2018.”