Net sales for Michelin Groupe were up 9.9% in the first quarter of 2017, led by early buying of tires ahead of the company’s price increase which went into effect April 1.
Michelin announced a price hike of up to 8% in North America on Jan. 31, and days later announced a similar increase in Europe.
In the first quarter, ended March 31, Michelin said volumes were up 7.3% compared to the same period a year ago. Another factor that attributed to the increase:“the sustained rebound in mining tire sales.”
Net sales totaled 5.6 billion euros, compared to 5.1 billion euros in the first quarter of 2016. The company didn’t release earnings.
Sales were up in all three of Michelin’s divisions. Sales figures are reported in euros.
|1Q 2017||1Q 2016||% Change|
|Passenger and light truck tires and related distribution||3.2 billion||2.9 billion||10.5%|
|Truck tires and related distribution||1.5 billion||1.4 billion||6.1%|
|Specialty (includes earthmover and ag tires)||.8 billion||.7 billion||14.9%|
|Total||5.6 billion||5.1 billion||9.9%|
The company reported a favorable currency effect of 2.5% for the first three months of 2017.
Passenger and light truck tires:
“Passenger car and light truck tire volumes increased by 8%, in global markets up 5% for the period. The mix effect remained favorable, thanks to the 31% surge in Michelin brand sales in the 18-inch and larger segment, and the success of the Michelin CrossClimate and Pilot Sport 4S lines.”
“Truck tire volumes rose by 3% over the quarter, in a global market up 8%, with a substantial contribution from demand in China, a country to which the Group’s market share is still limited.”
Earthmover tire net sales increased on the back of higher sales volumes. Net sales of farm tires “declined somewhat” in original equipment and “climbed steeply” in the replacement segment due to early buying ahead of price increases. Total volumes rose slightly over the period. Additional price increases of up to 12% were announced for the month of July in Europe.
Tire demand by region
Michelin says the passenger and light truck markets, in both original equipment and replacement, grew in every region. Figures are year-over-year percentages in number of new tires, as of March 31, 2017.
|Passenger and light truck market||OE||Replacement|
|Europe excluding Russia & CIS||5%||5%|
|Europe including Russia & CIS||5%||6%|
|Asia (including China, excluding India)||5%||7%|
|Africa, India & Middle East||1%||2%|
Truck tires: Figures are year-over-year percentages in number of new tires, as of March 31, 2017.
|Truck tire market||OE||Replacement|
|Europe excluding Russia & CIS||9%||13%|
|Europe including Russia & CIS||9%||13%|
|Asia (including China, excluding India)||16%||9%|
|Africa, India & Middle East||2%||-3%|