Michelin cuts 2018 forecasts as tire markets slow

Clermont-Ferrand, France – Groupe Michelin has issued a downward revision of its 2018 business forecasts in response to an unexpected weakening in trading conditions.

In particular, there has been a substantial slowdown at the end of third quarter in both passenger car and truck markets, the French tire maker reported 18 Oct.

Volume declines linked to price increases – introduced to offset currency-depreciations in emerging markets – continued into the final quarter, Michelin added in presentation to investors.

Michelin now expects growth in the passenger car & light truck (PC/LT) segment of between 0.5% and 0.7% – compared to the 1.5-1.8% range estimated in September.

The PC/LT downgrade, it said, reflected: a “sharp slowdown” in the global OE market particularly in China; cooling replacement demand for smaller (16’’ and below) tires; and currency depreciations in emerging countries.

In the heavy-truck tire market, meanwhile, Michelin has reversed an estimate of 0.5-1% growth to a decline of between 1.5% and 2% - on falling demand in China and currency depreciations.

Group-wide, Michelin now expects a “slight increase” in volumes for full-year 2018, and growth in operating income from recurring activities of at least €200 million, excluding currency effects.