(Reuters) -French tyre maker Michelin (EPA:MICP) reported on Wednesday a 4.6% decrease in sales, slightly below expectations, citing a decline in volumes mainly in its truck and speciality tyres division due to weaker demand.
The company, however, confirmed its 2024 guidance of segment operating income of 3.5 billion euros.
Sales came in at 6.64 billion euros ($7.09 billion) for the first three months of 2024, compared with 6.96 billion euros reported last year, and against the 6.68 billion euros expected by analysts in a company-provided consensus.
Michelin CFO Yves Chapot said that the group's worldwide production capacity for truck tyres would be reduced by 15%, following the planned conversion to passenger tyre manufacturing of its Shenyang site in China and Olsztyn plant in Poland, adding to the shutdown of two German facilities announced late 2023.
"Michelin's priority is to support people during these transitions," the group said. The shutdown of truck tyre production in Olsztyn will have no impact on jobs, a Michelin spokesperson told Reuters.
The French group, which makes tyres used in cars, aircraft, bicycles and industrial equipment, reported a 4.1% decline in volumes throughout the quarter, attributing it to "soft overall demand". Analysts had anticipated a 3.4% volume drop.
German competitor Continental in April reported revenue and profit margin below market expectations for the first quarter.
Europe's auto industry body ACEA reported a 5.2% year-on-year decrease in new car sales in March in the European Union, the first decline this year and the biggest since July 2022.
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