French tire manufacturer Michelin expects automotive tire demand to drop significantly this year due to the coronavirus pandemic, which is seen to continue weighing on the global economy. However, Michelin said that China’s recovery and governments’ stimulus might provide the market with some bright signs despite the gloomy outlook.
According to the tire maker, global demand for automotive tires will likely fall by 15%-20% in 2020, saying that it is vulnerable to a high risk of a major recession. Demand for car and light truck original equipment fell 70% in North America and 62% in Europe in the second quarter, while demand for replacement tyres decreased by 33% and 30%, respectively.
Michelin car tyre sales during the first half of 2020 declined 24%, with sales of truck tires declining 18%. Car tire sales recorded the deepest fall of 68% in February in China, while in North America the most significant decline was 61% in April. Michelin also said that sales of two-wheel tyres improved during the period, but sales of aircraft tires collapsed.
In the first half of the year, Michelin sales plunged to €9.414 billion ($11.07 billion), 20.6% below a year earlier. Meanwhile, profit in the period was €310 million ($363.55 million).
