The winter conditions of the past week have caused many people to have their winter tires screwed under the car. However, according to the VACO, the trade association for the tire and wheel sector, the temporary pressure does not outweigh the consequences of the corona crisis and the lockdown.
According to the trade association’s most recent ‘corona monitor’, a poll it is conducting among its members, the impact of the corona virus on the tire industry is growing. 70 percent of members notice that the number of customers is declining, an increase of 6 percent from the corona monitor in January. The average estimated revenue loss in the tire industry due to the corona crisis increased by 2 percent to 21 percent.
According to the VACO, the winter weather has caused a temporary pressure among the tire companies because customers had their winter tires fitted. 78 percent of the affiliated companies are confident that the corona crisis will have a good outcome, but the trade association reports that that confidence would have been much lower if the severe weather conditions had not occurred. However, the temporary revival does not outweigh the lasting consequences of the lockdown and working from home. Because cars are used less, the demand for tires is also decreasing.
The decline in demand for tires can also be seen in the annual figures of tire manufacturer Michelin, which were announced today. Turnover decreased by 15 percent to € 20 billion and net profit was € 625 million, a decrease of € 1.1 billion compared to 2019. Michelin still foresees an uncertain market for 2021, but nevertheless a growth of 6 to 10 percent in the tire market for passenger cars and delivery vans.