France’s Michelin said the European tyre market had grown by 4 points in July, showing signs of stabilization after the market shrank in the first three months of the year.
Still, we need to take all this with a pinch of salt, as we can now see the news pouring down on us regarding the August new car sales – all the main markets in Europe are down, from France, to Italy, Spain and most importantly, Germany.
German new car sales fell about 5% in August, extending the year-to-date decline in Europe’s biggest auto market to about 7%, after a small increase was recorded in July (2.1%).
As tyre manufacturers also rely on deals with manufacturers as OEM’s (original equipment manufacturer), the negative trend in August could have a negative impact for the main tyre makers. Still, their advantage is that sales are not entirely dependent on the new car sales, but rather on the need of the customers to have new tires every 4-5 years.
Michelin, which posted the figure on its website on Monday, is closely watching the market’s development as it weighs whether to further restructure its European operations.