LANXESS forecasts Europe auto market slump, global rise

21 March 2013 15:05  [Source: ICIS news]

DUSSELDORF (ICIS)--German specialty chemicals group LANXESS expects automotive production to fall by 8.5% year on year in western Europe during 2013, with auto tyre production sinking by 7.5% over the same period, the chairman of the company’s board of management said on Thursday.

The ongoing eurozone crisis means that the auto and tyre sectors are being hit by a lack of consumer confidence, according to Axel Heitmann. LANXESS is suffering from poor demand conditions and today issued a warning that its first quarter earnings would fall significantly as a result compared to the first quarter of 2012.

Heitmann added that EU new car registrations in February dropped by 10.5% from the same month a year before, to their lowest level in 20 years. New car sales in January were weak, whilst sales of original equipment tyres in February were 13% below last year.

However, Heitmann is more bullish about the global situation. A 10% increase in Chinese auto production should lead to a hike of 2.5% in global tyre manufacture for 2013, with some forecasts expanding that figure to 5%.

Tyre production in the Asia Pacific region is expected to grow by around 7.5% per year through to 2017 with a global figure of 5% annual growth, according to LANXESS estimates.

Heitmann said: “Car manufacturers like BMW, Audi, Fiat and Chrysler – and also some tyre producers – are planning new facilities and capacity expansions in Asia and Latin America. Volkswagen alone is planning to build seven new plants in China by 2018, nearly doubling its capacity there.”

By: Will Beacham
+44 20 8652 3214

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