Michelin temporarily closes some European factories, car tyre demand down 9%
Michelin has confirmed that it has decided to close its tyre production facilities “located in the European countries most affected” countries for at least one week. Tyres & Accessories understands this means Michelin’s factories in Italy (Cuneo and Alessandria), Spain (Lasarte, Vitoria, Aranda de Duero and Valladolid) and France (Cataroux, Les Gravanches, Le Puy-en-Velay, Roanne, Bourges, Montceau, Cholet, La Roche-sur-Yon, Golbey, Avallon, Montagny, Vannes, Joué-Lès-Tours and Troyes).
The actions come in response to the Covid-19 epidemic and specifically follow Michelin tyre market data as of end-February 2020, released on 18 March 2020. This data shows that passenger car and light truck tyre market demand is down 9 per cent year-on-year and the truck tyre market demand is down 16 per cent.
A Michelin Group statement added: “Now that the global economy is in the midst of a systemic crisis, the Group’s 2020 guidance is no longer relevant, without any possibility at present of assessing the potential impact. The Group is taking all of the initiatives required to attenuate as much as possible the negative consequences of the crisis on segment operating income and free cash flow. In addition, the Group has the sources of financing in place to deal with the uncertainty surrounding the crisis.”
Chris Smith, managing director of Michelin UK, said: “Employee safety has been – and continues to be – the absolute priority. That has played out in different ways across the world, of course, but in Europe some factories in Italy, France and Spain have been temporarily closed. The car tyre market globally has fallen by about 9 per cent year on year.
“We’re constantly reviewing the situation in the UK both in terms of employee and public safety and material supplies to our factories. It’s an incredibly fast-moving environment at the moment, but we’re confident we have the procedures and flexibility to keep people safe and to minimise as much as possible the impact on customers and the business.”