French Michelin Group logged 40% turnover growth in Q1, 2004. This is higher than anticipated at the beginning of the year and is based on the better-than expected performance of the Romanian market and of the exports.
"Turnover in the first quarter was about 40% higher than in the first quarter of 2003," says Juan Padera, Michelin Romania's chief executive.
This is above the 25% estimate the Michelin official provided early in the year.
If the first quarter pace maintains throughout the entire year, Michelin Romania could attain 140 million euro turnover.
"The turnover must also increase in 2005 compared with 2004. We believe it will exceed 150 million euros," Pradera added.
The growth beyond estimates of Michelin's business in the first three months is considered to be based on the very good performance of the local market and of the exports.
"Sales on the domestic market have increased, exports have increased, too, and the trend of the US currency that had a negative impact on our business last year actually helped us attain growth beyond estimates this year," adds Cristina Hanganu, Michelin Romania's communication manager.
Michelin is the leading player on the Romanian market, according to its officials. Its brands include Montana, Michelin, BF Goodrich, Kleber or Kormoran.
Out of the more than two million (car and truck) tyres sold on the Romanian market every year, over three quarters are low-end products. The middle and high-end tyres account for less than one quarter of the market, contrary to the situation in Western Europe, where they account for over 50%.
"Cars make up 50% of the sales of tyres in Romania in the first half of 2004, with the remaining 50% distributed among trucks, industrial and agricultural vehicles," Pradera added.
Michelin Romania posted 99 million euro turnover last year, up 30% from the previous year, largely because of exports. Its officials say more than 72% of Michelin's car tyre production coming out of Romanian assembly lines, as well as 66% of the truck tyre production was exported last year.
The development of the tyre market is directly influenced by the development of the automotive market. The first quarter of this year was the best after 1989 in terms of vehicle sales.
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