German rubber industry braces for ‘zero growth’ after 2019 decline

Frankfurt, Germany –Germany’s rubber industry is set for zero-growth in 2020, after a 4.2% year-on-year decline to €11 billion in 2019, the WDK has forecast.

Both the tire industry and technical rubber segment posted a decrease in sales for last year, according to the German rubber industry association. 

Tire deliveries fell 4.4% to €4.5 billion and technical rubber sales dropped 4% to €6.4 billion, said a WdK industry survey issued 4 March.

Whereas the automotive sector was generally down in the first half of the year, the WdK noted an overall decline across all industries in the second half of the year.

WdK linked the slowdown in the tire market to higher inventories as well as the “extremely mild” winter, which impacted the replacement and winter tire segments. 

Overall investment in the German rubber segment declined 5.1% to €650 million, while production volumes fell 3.9% to 1.5 million tonnes.

For 2020, the association expects a sideways development in sales with a tendency towards the “red zero.”

Furthermore, the Frankfurt-based association anticipates a further reduction in investment volume in 2020.

In addition to the weak demand - especially in China – the WdK expects the Covid-19 (coronavirus) epidemic to have a negative impact on businesses in early 2020. 

“Difficulties in the supply-chains are more likely, even though the impact on the raw material supply in the industry is currently described as manageable,” the association added. 

The WDK also expects domestic vehicle production to be at the - but not below - the low level of 2019. 

The trade body also said its members foresaw stagnation in business development among rubber products manufacturers.