By Mathias de Rozario
(Reuters) -Tyre maker Michelin (EPA:MICP) reported a slightly smaller than expected drop in first-quarter sales as its core automotive, scooters and motorcycles division outperformed.
Michelin’s sales fell 1.9% from a year earlier to 6.52 billion euros ($7.40 billion), compared with a forecast of 6.43 billion euros in a company-provided consensus.
"Volumes were down 7.3% due to lower original equipment sales in all segments, prolonging the trend observed in second-half 2024," the French company said.
Chief Financial Officer Yves Chapot said in a call with analysts, they were expecting the original equipment market to improve slightly in the second half of the year for their core Automobile and Two-wheel segment which includes mainly tyres for cars, light trucks, motorcycles and scooters.
Sales in the segment, rose by 1.2%, driven by growing sales in replacement tyres while its truck and speciality businesses segments were falling 3.5% and 7.3% in the quarter.
The group continue to be impacted by a slowdown in the automotive market, especially in Europe.
"Demand for new vehicles continued to be held back by persistent uncertainty about regulations governing the market’s transition towards hybrid and electric technologies, as well as by consumers’ reduced purchasing power," Michelin said.
The group, which employs more than 23,500 people at its production sites across the U.S. and Canada has, since March, been facing tariffs imposed by U.S. President Donald Trump.
"We have already made sure ... that some flows, either raw material or some components between some countries have been redirected, for example, between the US and China, or minimized in the other way in order to protect ourselves," Chapot said.
"Looking particularly at the US market, which represents 30% of our sales, 70% of what we sell in the USA is built in the USA, and this percentage is going up to 85% if we include Canada," he added.
Michelin also maintained its full-year guidance.
($1 = 0.8807 euros)