Tyre market meltdown continues

ERJ staff report (DS)

Paris - Michelin has updated its website with tyre market data for the month of December. The new data from December shows universal declines in demand, with the sole exception of a surprise rise in European replacement demand, driven by winter tyre sales.

In radial truck OE sales, every market in the world fell in the month of December. Europe's sharp decline has continued. Although the full year saw a small (0.9 percent) decrease, December's sales fell by 40.7 percent year on year., even worse than the disastrous 36.1 percent seen in November. The appalling decline in North American truck OE sales has continued, with sales in the first twelve months down by 16.5 percent, not helpedby a fall in December of 19.8 percent.

The Brazilian market's sharp slowdown continued in December. Although sales were up by 13.2 percent in the year to date, the month of December showed a massive drop of 45.1 percent. It was a similar story in China, with sales up by 3.3 percent in the year to date but down by 27.5 percent in the month of December. Japanese OE sales also reversed, showing a growth of 10.6 percent in the year to date, although the monthly growth in December also turned sharply negative, at -38.6 percent.

Truck replacement tyres also moved to negative growth throughout the world in December. European truck tyre markets fell by 9.7 percent in the first twelve months, made worse by a 31 percent decline in December. North America fell by 8.2 percent in the year to December, and 15.9 percent in the year-on-year figure. In Brazil, a year-on-year fall of 23.1 percent slowed the twelve-month figure growth to 15.6 percent. Asian replacement markets were also weak, with China showing 8.2 percent growth in the year to December, but this masked a decline of 24 percent in the most recent month. Japanese truck tyre sales fell sharply in December. The 25.8 percent decline bringing the year-to-date figure to a decline of 8.2 percent.

As has been recorded elsewhere, the OE car business has been in meltdown. Michelin said the total European OE market for car tyres in the twelve months to December 2008 was down by 7.2 percent, while the year-on-year figure for December dropped by a massive 39.1 percent, even worse than the 33.5 percent recorded for November. The site gives only percentage changes, not absolute numbers. The North American market continued its downtrend, with the equivalent figures showing a decline of 16.5 percent for the twelve-month period and a year-on-year decrease in December of 29.7 percent, just marginally less bad than the figure of 31.2 percent seen in November.

In the replacement business, the winter tyre sales helped reverse the decline in Europe. in December the twelve-month figures showed a fall of 4.0 percent while the one-month figure rose by 7.6 percent. In North America, the replacement market fell by 5.3 percent in the first twelve months, hot helped by a decline in December of 4.0 percent.

Chinese replacement sales were a single bright spot, with the increase in the year to date running at 18.1 percent.

Market changes in 2008 (source Michelin)

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Press release from Michelin