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-15% global production capacity for heavy-duty tires
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The Polish site in Olsztyn will specialize in car tires
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Strong competition from “budget” truck tires imported from Asia
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Michelin is banking on the large tires needed by electric cars
(Updated with details, context)
by Gilles Guillaume
Stopping by Michelin
MICP.PA of its production of heavy-duty tires in Olsztyn (Poland), faced with competition from low-cost Asian products, as well as in Shenyang (China), this time attributable to the sluggishness of the local market, will help to reduce by 15% of the group’s global production capacity, its financial director said on Wednesday.
As part of the ongoing adaptation of its industrial system, Michelin announced locally this quarter the conversion of the two factories to the production of car tires. These decisions come in addition to the closure of its heavy goods vehicle tire sites in Karlsruhe and Homburg in Germany, announced at the end of 2023.
In Europe, Michelin’s heavy-duty tire production facility will now be focused on Spain, Italy and Romania.
During a conference call with analysts organized on the occasion of the publication of quarterly sales showing a sharper decline than expected, due in particular to sluggish demand for truck and specialty tires, Yves Chapot also indicated that the industrial adjustments announced in 2023 and 2024 would reduce the group’s production capacity in smaller tires for cars by 7%.
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Michelin-CA down 4.6% in Q1 due to sluggish demand, targets confirmed
Building on its premium positioning, Michelin is focusing on larger tires, 18 inches or more, more suited to SUVs but also to electric cars where they better withstand the high weight and torque.
“Michelin’s priority is to support people in these changes,” Michelin added Wednesday in its results press release.
The closure of the heavy goods vehicle activity in Olsztyn, whose passenger-van tire activity will be modernized, will not have an impact on jobs, said a spokesperson for the group because the people concerned “will evolve into new activities linked to this refocusing.
(Report by Gilles Guillaume, edited by Zhifan Liu)