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Passenger car sales fell in Europe’s significant business sectors in February, as a debilitating worldwide economy, higher vehicle taxes and the COVID-19 flare-up burdened purchasers’ hunger for new vehicles.
In February 2020, new vehicle registrations dropped 7.2% to 1.067 million vehicles in the European Union, Britain and the European Free Trade Association (EFTA) nations, measurements by the European Auto Industry Association (ACEA) appeared.
Deals succumbed to the second successive month in EU’s significant business sectors, with Italy dropping 8.8%, Germany 10.8%, France 2.7% and Spain 6% in February.
Volkswagen’s deals were down 4.4% in February, while Renault and PSA Group posted a drop of 14.3% and 8.5%, separately. BMW kept on being among the couple of automakers announcing an expansion in European deals a month ago, rising 2.1%, while interest for rival Daimler fell 11.9%.
The drop comes as Europe is wrestling with the COVID-19 pandemic and Italy turning into the most exceedingly awful hit nation outside of China.
In Europe, hatchbacks are popular and comprise ~28% of new car sales every year. Many base variants of such popular hatchbacks (VW Polo, VW Golf, Toyota Yaris, Fiat 500) have 14- and 15-inch tires going up to 17- and 18-inch tires on higher trims/ sports variants.
Unlike the US where 225-mm & 235 mm section tires are most common, in Europe 205- and 215-mm section tires can be found on many vehicles.
Tire maker Goodyear has entered the online business space in Europe.
It has dispatched online deals of the tires in Germany as the pilot market on the landmass. Steadily, the organization will dispatch this program in more business sectors across Europe.
Goodyear is offering the German shoppers the choice to buy tires and timetable establishment on its site. It asserts the web-based business will offer a consistent shopping experience and will empower gradual development for the neighbourhood retail accomplices.
Cooper Tire Europe is satisfied to affirm that terms have been concurred with Fintyre for the select conveyance of light vehicle tires to the Italian market. Under the arrangement, Cooper will supply passenger car, SUV and van tires through Fintyre. By uniting with Fintyre, Cooper will upgrade its inventory network in this key European market
COVID-19 hit the car and tire industries heavily in spring 2020, as restrictions entered into force impacting the movement and buying behaviour of consumers. Even though some signs of improving demand could be seen during the second half of the year, the entire year was overshadowed by uncertainty. The cause of the drop in sales of the passenger car market in Europe was the global decline in automotive production.
Under these exceptional conditions, the companies focused on safeguarding the health and safety of their employees and ensured the continuity of their business. The major players quickly reacted to changes in the market by adjusting their production, cutting costs, and reducing investments. Special attention was paid to cash flow through active working capital management. These tactical measures were effective and enabled good results toward the end of the year.
Nokian tyres in its report states that the Covid-19 restrictions impacted their sales in Russia (impact approximately EUR 50 million), and the low factory utilization rate in all locations.
The passenger car tire market in Europe is estimated at $XX Billion in 2020, growing at –% CAGR till 2026.
Europe tire market can be segregated based on vehicle type, online vs offline, radial vs bias, and demand category. Based on radial vs bias, the tire market is dominated by the radial tire segment with a market share of 91.53% in 2020 and the trend is likely to continue through 2025. Radial tires offer several benefits over bias tires, such as better mileage, lesser fuel consumption and better road grip. Thus, consumers in the country mostly prefer radial tires.
The major players operating in the Europe tire market include Compagnie Générale des Établissements Michelin, Goodyear Dunlop Tires Europe B.V., Continental Aktiengesellschaft, Bridgestone Europe NV/SA, Pirelli & C. S.p.A., Nokian Tyres Plc, Yokohama Europe GmbH, Hankook Reifen Deutschland GmbH, Apollo Vredestein B.V., and Cooper Tire & Rubber Company Europe Limited. Major companies are developing advanced technologies in order to stay competitive in the market. Other competitive strategies include mergers & acquisitions.
Michelin witnessed a 15% drop in annual sales in 2020. To counter this, the company has moved few of its plants closer to the high-volume customers, by increasing the production in plants like Indonesia and Mexico.
Goodyear tires expects raw material costs to increase from $125M to $175M as natural rubber and butadiene prices have already crossed pre-COVID levels. Carbon Black prices are gradually increasing in the global market. China’s consumer replacement volume continued to exceed the industry with approximately >10% growth witnessed in 2020.
In 2020, net sales of Passenger Car Tyres totaled EUR 871.3 million (1,123.8). Nokian tyres segment operating profit was EUR 177.8 million (308.5).
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