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November 2009
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Rubber Journal Asia

Tyre companies fare better in the third quarter
While third quarter results from tyre majors Bridgestone, Goodyear and Michelin were better than the second quarter Hankook stood out with its whopping increase in profit.

Goodyear reported 15% lower sales, compared to 2008, but 11% higher than the second quarter. “The strength of our brands and steady stream of new and innovative tyres such as our branded fuel-efficient tyres provided marketplace momentum and led a strong third quarter performance,” said Robert J. Keegan, Chairman. During the third quarter, the company reduced its global work force by 300 positions, adding to approximately 5,500 first half reductions. The company’s full-year target was a reduction of 5,000 positions.

Sales for Michelin, the world's second largest tyre maker, dropped 11% in the third quarter, compared to the same period last year. The company said its passenger car tyre sales were EUR2.09 billion, a 4.6% decrease. Truck tyres dropped to EUR1.21 billion, an 18% decrease. Michelin maintains its objective of generating positive free cash flow in the second half of 2009.

Japanese Bridgestone, meanwhile, reported net sales of US$20.75 billion and operating income of 12 billion, a decrease of 25% and 90% respectively, compared to the previous fiscal year. Its net loss was US$303.37 million, while its net sales and operating income decreased by 24% and 83% respectively from last year. The company said unit sales of tyres in Japan and the US were down due to the impact of slumping demand brought on by a major decline in sales for passenger cars, light trucks, trucks and busses.

The only bright spot was from South Korean Hankook Tire that had 26.4% higher sales and what it says is an “astounding” increase in operating profit of 536.4%. Hankook also attained a global operating profit rate of 19.1%. Said CEO Seung Hwa Suh, “Despite the economic climate, Hankook Tire has continued to stand out with its record high performance.” He also said that Hankook remains positive about growth prospects for the future. The US replacement sales in the third quarter jumped 18% over the second quarter and were 21% ahead of the same period for 2008. The most significant boost in sales has come in the ultra-high performance tyre segment.

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