Michelin Suffers Under Bad Market Conditions
The French group has achieved a rise of 4.5 per cent in the first half of 2001, compared to the same period last year, and now has a turnover of 7710 million Euro, but the EBIT has fallen 9 per cent to 491 million Euro. Analysts had been expecting a slightly better result.
As a prominent supplier of truck tyres, Michelin is suffering under the very bad market conditions prevailing in the US. Not only did the OE market fall, but – and this was unexpected – so did the replacement market, and the company cannot foresee any improvements in the US market for the second half of the year. Michelin as a group did not sell as many tyres as expected, as a result of the Fiestone recall, but the trend towards premium brands (the so-called “flight to quality”) still exists.
The Michelin brand has sold a lot more tyres than in previous years, which gives the group much better margins. The return on sales for the whole year should be between 6.2 and 6.
8 per cent – some months ago, 7.7 to 8.3 per cent was expected.