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%.
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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 grow 6%-10% in 2021, with the truck tyre market growing 4%-8%.