By Oliver Hall
Michelin tyres reported its sales fell 14.2 per cent to 3.5 billion euros during the first quarter as worldwide demand for tyres has plummeted.
The French tyres maker revealed that demand was down in all of its markets, except China, and that unit sales plunged 24.4 per cent in the same period.
The crippling losses were felt most acutely in the Original Equipment market and the truck tyres sector.
However, Michelin reported that inventory volumes were stable over the past three months due to production flexibility programmes, which will be stepped up in the second quarter to help optimise working capital.
Michelin have also sharply curtailed capital expenditure in line with an annual budget held to 700million euros allocated between the first and second halves.
Michelin, which vies with Japan’s Bridgestone tyre group for the title of world’s biggest tyre maker, said that tyre markets around the world were suffering from the decline in demand.
The company said its priority for 2009 will be on managing cash and sharply reducing capital expenditure, and claimed that it was well on track to meet its objective of generating positive free cash flow in 2009.