Conti expects lower purchasing power to impact tire markets

Hanover, Germany – Continental AG has reported a 5.3% overall fall in tire volumes over the first half of 2022 and expects the negative trend to continue as consumer purchasing power weakens.

In a conference call 13 Aug, chief financial officer Katja Durrfeld said the lower first half volumes reflected a “significant decline” in demand in the replacement tire business.

“For example, demand in the Chinese business did not pick up as hoped following the ending of the key Covid-19-related lockdowns,” Durrfeld explained.

On another front, she said, Continental was unable to fully meet demand in the North American market “due to a lack of high availability.”

Durrfeld went on to say that with weakening purchasing power, consumers are likely to shift demand from premium brands to lower-priced brands and from winter tires to all-season tires.

In addition, she said retailers had already stocked up with tires earlier this year, a move that will impact replacement volumes going forward.

The replacement volume forecast comes in sharp contrast with Conti's prior-year performance when it reported strong growth within the segment – almost reaching 2019 levels.