Chinese demand drives tyre maker Michelin back to growth

Chinese demand drives tyre maker Michelin back to growth

Summary

Chinese demand drives tyre maker Michelin back to growth

Michelin's sales returned to growth in January-March, boosted by a sharp rebound in demand in China, the French tyre maker said on Monday.

First-quarter sales rose 2.3% year-on-year to 5.45 billion euros ($6.58 billion) as tyre volumes for new passenger cars and light trucks surged 80% in China, with replacement rates up 36%.

The demand in China rose close to 2019 levels, Michelin said, as the carmaking industry there suffered less from a shortage of electronic components than other markets.

"Despite the disruptions from the Covid-19 pandemic and a certain amount of disorganization in the supply chain, Michelin delivered a robust performance in a first-quarter shaped by an upturn in global demand", Chief Executive Florent Menegaux said in a statement.

Michelin kept its guidance for 2021 adjusted operating income of more than 2.5 billion euros, and free cash flow of 1 billion euros, in what it described as a "highly uncertain" environment.

The tyre maker said the passenger car and light truck tyre markets were expected to gow 6%-10% in 2021, with the truck tyre market growing 4%-8%.