In the past 10 years, the Beijing and Shanghai auto shows, the image of Michelin “Mr Bibideng†and the media center they sponsored at the show have left a deep impression on people. But at the 2009 Shanghai Auto Show that opened two weeks later, this unique landscape will no longer exist. Michelin insiders said that in addition to exiting the Shanghai auto show, they did not participate in the exhibition plan for the entire year.
In the face of the economic downturn, even bigwigs such as Michelin and Goodyear had to shrink their spending and tighten their pants. Due to the drag from the downstream auto industry, the demand for tires in most parts of the world has dropped sharply, which has made many tire companies more pragmatic as the cold winter comes. On the contrary, those multinational tire companies that entered China later were not moved and were deploying their own expansion plans step by step.
Michelin withdraws from Shanghai auto show after 10 years of marriage
In this spring season, the world's major tire manufacturers, dragged down by the auto industry, still feel the slightest chill.
The reporter was confirmed by Michelin's internals. Michelin, who had been associated with the Shanghai and Beijing auto shows for 10 years, chose to withdraw this year. Miss Li Michelin China Public Relations Department told reporters that not only that, they did not plan to participate in other exhibitions throughout the year, but plans to launch several new tires in the second half.
From the 2008 financial report released by the Michelin Group, it can be seen that its net sales decreased by 2.7% year-on-year (at a constant exchange rate, it increased by 1.1%). The sharp contraction in market demand was revealed in the second half of last year. In 2008, sales volume fell by 2.9%, especially due to the sharp drop in demand for replacement tires. In the fourth quarter, vehicle manufacturers stopped production, and the original tire business was even more sluggish, with a 16% decline in sales volume. Overall, operating profits after deducting non-recurring items fell by 44% due to falling sales, rising raw material prices and idle production costs.
He Liye, a managing partner of the Michelin Group, stated that under the current status, Michelin has decided to significantly reduce capital expenditures in 2009 to increase factory flexibility, strengthen inventory management, and optimize cash flow to cope with the generally bearish market in the coming months. “The factors that support Michelin’s profitability this year are the combined effects of the price increase actions in 2008 and the decline in the prices of raw materials (especially natural rubber and petroleum derivatives) that will be generated throughout the year.â€
At the same time, capital expenditures will be reduced to about 700 million Euros, focusing on the expansion of new high growth potential markets. Compared with previous years, Michelin will be more focused on improving profitability and maintaining a sound financial position. He Liye expects that the tire market will continue to be well below the level of the previous year in the first half of this year. Then, as the replacement tire market gradually replenish stocks, the business is expected to begin recovery.
Weight loss is not just Michelin. Goodyear Tire announced sales and revenue in the fourth quarter of 2008 that showed that Goodyear's Asia Pacific sales were US$381 million in the fourth quarter, and sales in 2008 were US$19.5 billion, a slight drop from 2007. In response, Robert Zigen, chairman and chief executive of Goodyear, said that he will respond to current market changes by promoting top-line growth, reducing cost and cash flow management, and will focus on market demand and introduce more innovations. Products, further reduce costs by about 700 million U.S. dollars, while reducing capital expenditures and inventory.
Only Hankook Tire had a slightly better day. In its 2008 global sales report, its annual sales reached 3.7 billion U.S. dollars, achieving a target of 5.1% growth. Significant growth has been achieved in core businesses in major global markets: sales in the Russian market have increased by 98%, and sales in Central America and South America have increased by 50%. The new Chairman of Hankook China, Xu Qilie, stated that this year, Hankook Tire The focus is on opening the market for big tires, especially for the truck and passenger car tire market. To this end, three new products will be introduced to the Chinese market this year, covering the use of buses, trucks, and engineering vehicles to further increase market share.
"Later" expansion plan has not changed
Under the impact of the financial crisis, as the auto market slowed down, tire manufacturers have reduced their expansion plans. But for the still growing Chinese market, tire manufacturers that have not yet built large factories in China still have ambitious expansion plans.
One example is Pirelli tyres, the fifth-largest tire company in China that entered China relatively late. Bai Bei, general manager of the Italian tire company in China, said that it will expand the production capacity of passenger car tires and truck tires in China. The expansion plan will increase the investment by 100 million U.S. dollars. By 2011, Pirelli will have an annual output of 11 million tires. Total production capacity, production capacity doubled now. At the same time, Pirelli high-profile into the sports field for brand promotion, became the title sponsor of the Super League for three years.
Yokohama Rubber also maintains planned capacity expansion plans. The head of Yokohama Rubber (China) Co., Ltd. stated that it does not intend to cut production in China because its current production capacity cannot meet the market demand for the branded products. In the first quarter of this year, after completing an energy expansion of US$25.4 million, Hangzhou Yokohama Tire Co., Ltd. can now produce 300,000 passenger car tires per year. The responsible person analyzed that if the company, like other tire companies that entered China earlier, has already built a large factory in China, it is estimated that it will be difficult to avoid a reduction in production.
Construction Hardware,Socket Set Co., Ltd. , http://www.nsautofastener.com