Michelin reported first quarter revenue down 8.1% as the recession in its home region severely affected demand.
Europe’s largest tiremaker said that sales during the first quarter fell to 4.88 billion euro from 5.3 billion euro during the same period last year. The company still expects ‘stable’ earnings and ‘steady’ volume this year, help helped by a reorganizing plan in the absence of recovery in its home market.
Michelin said that demand for earthmovers, defense aircraft and tractors is dropping sharply in Europe, North America and other important markets. The company will focus on markets outside Europe and on selling specialty tires, which are used on large vehicles.
“If volumes stay at the levels at which they are today, that would imply some European restructuring,” Chief Financial Officer Marc Henry said on a conference call with analysts. “This is under scrutiny of course, but nothing is said yet.”
During the first quarter, revenue from car and light-truck tires dropped 6.5% to 2.58 billion euro, heavy-truck tire sales fell 7.9% to 1.48 billion euro and specialty tire sales, which is Michelin’s most profitable product line, also fell 13% to 818 million euro.