News from Notch Consulting, Inc.

July 17, 2020

COVID causes steep drop in European replacement tire sales in 2Q

Filed under: Coronavirus/COVID-19, Tires — Notch @ 6:13 pm

On July 14, the European Tyre and Rubber Manufacturers’ Association (ETRMA) released data for its members replacement tire sales for the second quarter of 2020. The figures show that the COVID-19 pandemic caused the worst sales results in the history of ETRMA.

Comparing the second quarter of 2020 to Q2 2019, passenger car tires sales declined by 31%, while the decline for the first half of 2020 was 22%. In truck tires, Q2 sales declined 23%, while sale for the first half of 2020 were down 14%. Agricultural tires fared the best, seeing a decline of just 4% in Q2 and 9% for the first half of 2020.

After having been shut for an average of 33 days due to Covid-19, all tyre manufacturers in Europe slowly resumed their production in May when most European countries eased their lockdowns. As a result, there was a slight upward trend in tyre replacement sales visible towards the end of the quarter. Whether this trend will hold remains to be seen in the coming months. Being a global industry, the recovery of the tyre sector is not just dependent on Europe’s situation but how other parts of the world and global trade routes continue to be impacted by and address the pandemic.

 

EU auto registrations down 38% in first half of 2020

Filed under: Auto, Coronavirus/COVID-19 — Notch @ 5:49 pm

On July 16, the European Automobile Manufacturers Association released data on registrations of new passenger cars in the EU for June and for the first half of 2020. For the first six months of 2020, registrations were down 38.1% relative to the same period of 2018. Declines for the individual months are below:

  • January: -7.5%
  • February: -7.4%
  • March: -55.1%
  • April: -76.3%
  • May: -52.3%
  • June: -22.3%

Over the first half of 2020, EU demand for new passenger cars contracted by 38.1%, the result of four consecutive months of unprecedented declines across the region. Among the four major EU markets, Spain saw the biggest decline (-50.9%) so far this year, followed by Italy (-46.1%), France (-38.6%) and Germany (-34.5%).

June 10, 2020

ITEC 2020 shifts to virtual event

Filed under: Conferences, Coronavirus/COVID-19 — Notch @ 9:42 pm

The next International Tire Exhibition and Conference, which is scheduled for September 8-18, 2020, will transition to a virtual event this year. The biennial conference is sponsored by Rubber & Plastics News and typically held in Akron, Ohio. The decision was made in response to the COVID-19 pandemic. The dates of conference remain unchanged, with a livestream covering the conference sessions, including keynote speakers, individual presentations, and panel sessions.

June 8, 2020

Goodyear forecasts 50% drop in tire volumes in Q2

Filed under: Coronavirus/COVID-19, Rubber, Tires — Notch @ 12:42 am

In a 424B filing to the Securities and Exchange Commission dated May 13, 2020, Goodyear Tire & Rubber provided an overview of its actions in response to COVID-19 and a view of the tire industry’s performance in 2020.

We currently believe that our largest volume declines will occur in the second quarter of 2020, with volumes down approximately 50% compared to the second quarter of 2019. Overhead absorption will also continue to be adversely affected by reduced plant production during the second quarter of 2020. We are currently planning for our production to be down almost 25 million units versus the second quarter of 2019 in order to reflect expected demand and to reduce inventory.

In addition, our other tire-related businesses are also being significantly affected by the weakening economic environment. Traffic and volume at our retail locations is low and the sharp drop in business and leisure travel is adversely impacting our aviation business. Our chemicals business is also feeling the effects of the decline in tire production. In total, the year-over-year earnings decline in our other tire-related businesses is expected to be about $150 million during the second quarter of 2020.

For the full year of 2020, we now expect our raw material costs will be a benefit of $50 million to $100 million compared to 2019, excluding transactional foreign currency and raw material cost saving measures. Natural and synthetic rubber prices and other commodity prices historically have been volatile, and this estimate could change significantly based on fluctuations in the cost of these and other key raw materials. We are continuing to focus on price and product mix, to substitute lower cost materials where possible, to work to identify additional substitution opportunities, to reduce the amount of material required in each tire, and to pursue alternative raw materials.

May 12, 2020

Cabot reports Q2 FY 2020 results

Filed under: Carbon Black, Coronavirus/COVID-19, Uncategorized — Notch @ 12:04 pm

On Monday, Cabot Corporation reported results for its Q2 FY2020. Net sales declined to $710 million for the quarter ended March 31, 2020 from $844 million in the same quarter of FY2019, a drop of 16%. In Reinforcement Materials, volumes decreased 14% year-over-year as the COVID-19 pandemic impacted demand. The impact was most pronounced in Asia but impacted both Americas and EMEA demand at the end of the quarter. Offsetting the lower volumes were higher margins due to pricing and mix benefits in both the tire and industrial product lines. Net sales in the Reinforcement Materials business totaled $355 million for 2Q FY2020, down 20% from $445 million in the same quarter of 2019.

Changes in Reinforcement Materials volumes (Q2 2020 YOY change):

  • Global: -14%
  • Asia: -20%
  • Europe, Middle East, Africa: -13%
  • Americas: -8%

Performance Chemicals saw net sales of $245 million in Q2 FY2020, down 3.5% from $254 million in the same quarter of 2019.

Cabot held its earnings conference call on the results earlier today.

May 11, 2020

US Ford factories preparing to restart

Filed under: Auto, Coronavirus/COVID-19, Rubber — Notch @ 9:13 pm

On May 18, Ford Motor Co. will resume most North American vehicle production following the lifting of restrictions by Michigan Gov. Gretchen Whitmer, with parts depots resuming operations on May 1.

The Flat Rock Assembly Plant in southeast Michigan and Oakville Assembly Complex in Canada will remain closed until May 25.

May 5, 2020

Tire production resumes at Toyo plant in Georgia

Filed under: Coronavirus/COVID-19, General, Tires — Notch @ 11:05 pm

On May 3, Toyo Tire Holdings of Americas Inc. will reopen its White, Georgia tire plant, ramping up gradually on a revised shift schedule.  The plant has been idled since March 30 due to the COVID-19 pandemic.

Toyo is implementing additional health and safety measures based on CDC guidelines.

Bridgestone Iowa plant confirms 8 employees test positive for COVID-19

Filed under: Coronavirus/COVID-19, Rubber, Tires — Notch @ 10:10 pm

Bridgestone Americas Inc.’s agricultural tire plant in Des Moines confirms 8 employees have tested positive for COVID-19.  The company is addressing the outbreak using protocols established before Bridgestone resumed production on April 13.

Enterprise Crisis Management Team has been monitoring the spread of the coronavirus and consulting federal, state and local officials to coordinate risk mitigation and business continuity strategies.

Bridgestone said the plant will remain in production but will continue to monitor the situation closely and adjust as necessary.

April 28, 2020

Partial production resumes at one Apollo plant in India

Filed under: Coronavirus/COVID-19, General, Rubber, Tires — Notch @ 12:43 pm

Apollo Tyres Ltd. has resumed partial production at its factory in Perambra, India after government directives exempted its operations from lockdowns, according to a stock exchange filing.

The tire maker idled production at other Indian facilities in Kalamassery, Limda, Gujarat and Chennaiother amid concerns over the COVID-19 outbreak, and will provide updates on the restart of production in these facilities as decisions are made.

Yokohama to restart Mississippi plant

Filed under: Coronavirus/COVID-19, Rubber, Tires — Notch @ 12:21 pm

On April 27, Yokohama Corp. of North America will restart production at its commercial tire plant in West Point, Mississippi, after closure on March 28 due to the COVID-19 pandemic.

Yokohama will implement safety procedures based on CDC guidelines and local guidelines.

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