Michelin scraps Mexico plant plan due slowdown
Written on August 29, 2008
Michelin (MICP.PA: Quote, Profile, Research, Stock Buzz) of France on Friday scrapped plans for a second plant in Mexico due to slow demand in North America.
Carmakers are battling with slowing demand in the mature markets of the United States, Europe and Japan. Toyota Motor Corp,7203.T> on Thursday cut its 2009 vehicle sales forecast by nearly 7 percent.
Michelin, one of the largest tire makers in the world, has already embarked upon a cost savings program to offset slowing economies, lower dollar prices and a rise in the cost of rubber and steel.
It said in August 2007 it would build a plant in the Mexican state of Guanajuato to supply the North American market.
Michelin said productivity gains and additional investment in existing North American facilities would enable it to respond to continued strong demand for high-performance and large-diameter tires quick payday.
All of Michelin’s other investment projects in North America will continue, the company said.
According to data on the Michelin website, total sales of passenger tires to carmakers were down 14.9 percent in June compared with a year ago in North America while the market for replacement tires there was up 1.1 percent.
Year to date, passenger car tires were down 12.2 percent and replacement tires 1.7 percent.
Filed in: technology.