Volumes Are Down, But Sales Are Way Up at Michelin

Posted on April 25, 2019

Michelin Group recorded a double-digit increase in global sales for the first quarter of 2019, despite a slight decrease in volumes — namely in passenger and light truck tires.

The company reported sales of 5.809 billion euros ($6.5 billion), up from 5,218 billion euros for the first quarter of 2018.

Michelin did not report earnings for the period.

The tire maker says volumes were down by 25 tons, or 0.5%. Here’s what else contributed to the company’s report:

  • A 2% increase from a favorable price-mix effect. Prices added 1.3%, “reflecting the Group’s disciplined price management,” and the mix effect added another 0.7% as the up-market shift in the product mix continued.
  • A 2% increase from the favorable currency effect, primarily attributed to U.S. dollar/euro rates.
  • A strong 7.8% increase from changes in the scope of consolidation, with contributions of its 2018 acquisitions of Fenner and Camso, “partially offsetting the deconsolidation of TCi.”

Jean-Dominique Senard, CEO, said, “In difficult markets, we once again demonstrated the resilence afforded by our Group’s exposure to different economic sectors, allowing us to confirm our 2019 guidance. First-quarter sales also reflect the major contribution of our recent acquisitions, Camso and Fenner.”

As for Camso specifically, Michelin says sales were up 9% in the first quarter. Camso's powersport business recorded a 29% increase, but the agriculture segment was up 9%, material handling was up 8%, and construction increased 5% in the period. (The material handing and construction segments dominate Camso's business, with 72% of overall sales.)

Michelin’s view of the replacement market

As part of the company’s regular quarterly financial reports, the company provides and overview of the passenger and light truck tire, truck tires and specialty market segments. It breaks down the data for both the original equipment and replacement market in its review.

And Michelin saw good things in the U.S. replacement market for passenger and light truck tires. Across North America, demand grew by 5%. “The United States market expanded by 5%, reflecting a sharp increase in the non pool market (with imports rising ahead of the possible introduction of new import duties), while the market in Canada declined by 2% due to lower demand for winter tires.”

The OE market for passenger and light truck tires declined by 5% for the first quarter, Michelin said. (That figure includes Central America.)

In truck tires, it was the opposite. The North American OE truck tire market expanded by 12% — on the back of 19% growth in 2018. But the replacement truck tire market decreased by 7%. “After significantly increasing their Chinese tire imports in late 2018, ahead of the possible introduction of new import duties, dealers focused on reducing their inventories in the first quarter.”

As for specialty tires (Michelin lumps mining, off-the-road, motorcycle and aircraft tires into this single category), the company says OE tires for OTR fitments in the farming segment “continued to grow rapidly in North America,” while replacement demand declined in North America due to unfavorable weather and declining farm incomes.

Related Topics: Michelin, Michelin financials

Comments ( 0 )
More Stories
News Ford Has New Motorcraft Diesel Fuel Filter

Ford Motor Co. has added a Motorcraft F-150 3.0L diesel fuel filter (FD4627) to its lineup of diesel fuel filters for Super Duty Power Stroke Turbo Diesel engines (FD4615 and FD4625).

(from left): John Quirk, chairman and CEO; Robert Kaffel, district manager; Paul Boudreau, district manager;  Allyn Belair, service manager;   Framingham Mayor Yvonne Spicer; Fitzroy Letts, service manager; Dennis Giombetti, chair-district 5 city councilor (Framingham); Dustin Mellor, district manager; Gerry Kostro, director of equipment, shop training and tech school partnerships; Bruce Cochran, Valvoline representative;  Randy Delgado, Framingham store technician;  Joe Comley, Valvoline direct market sales manager; Felix Mercado, Framingham store technician; and Corey Boylen, Framingham service manager II. 
News VIP Tires & Service Is Changing Oil for Education at Its Newest Store

VIP Inc. paired the grand opening of its newest store with the launch of a two-month-long $10 oil change promotion to benefit a local school district.

Bill Walker (third from left) is the newest member of the Big O Tires Hall of Fame. He is pictured with Big O Tires executives (from left): Rick O'Neil, Jim Bull and John Kairys.
News Big O Tires Adds to Hall of Fame and Honors Top Franchisees

Big O Tires LLC recognized its top performers for both business success and contributions to the growth of the franchise during its 2019 convention.

Be the First to Know

Get the latest news and most popular articles from MTD delivered straight to your inbox. Stay on top of the tire industry and don't miss a thing!