Michelin Reports 2020 Sales, Income Declines
The Michelin Group posted global sales of 20 billion euros during 2020, a 15% decline from previous-year levels. The company's segment operating income for the full year totaled slightly more than1.8 billion euros, a 37% drop from 2019 results.
Declines were driven by "the COVID-19 crisis," which Michelin officials say resulted in a 14% "decline in volumes and the under-absorption of production plant fixed costs."
Michelin also has provided an assessment of various product segments in which it operates. (Documents are available here.)
On the passenger and light truck tire side, original equipment channel demand contracted by 33% during the first six months of 2020, but experienced "a marked improvement in the second six months with global demand in-line with the second half of 2019 and a 2% gain in the final quarter."
In North America, "automaker inventory rebuilding lifted demand back in-line with 2019 levels in the second half" of 2020.
In the replacement channel, global consumer tire demand "steadily improved throughout the second six months, ending the period 3% down year-on-year with, in particular, fourth quarter 2020 demand coming close to the level seen in the fourth quarter (of) 2019.
"In North and Central America, at a time of economic recovery and speculative buying ahead of possible new U.S. duties on tires imported from South Korea, Thailand, Vietnam and Taiwan, replacement demand rose by 2% during the second half (4% in the United States), easing the market decline to 9% for the year."
When discussing the medium truck tire segment, Michelin officials say "original equipment demand declined by 28% over the year" in North and Central America, "with a slight improvement in the second half (down 13%) compared with the first (down 41%.) The decline eased to 3% in the final quarter" of 2020, "which saw a sharp upturn in OEM orders in the United States."
Demand for medium truck tires in the replacement channel improved by 3% in North America during the second half of 2020, driven by a "stronger-than-expected upturn in business activity and freight transportation," according to Michelin officials.