Michelin & Cie (ML) rose the most in four weeks after Europe’s largest tiremaker reported monthly industry volumes that showed signs of stabilization in the region’s car market, which is poised to decline for the sixth straight year.
Michelin advanced as much as 3.7 percent to 69 euros, the biggest intraday jump since May 17, and was up 3.6 percent at 11:54 a.m. in Paris. The number of shares traded was more than 53 percent of the three-month daily average. The stock has lost 3.7 percent this year, giving the company a market value of 12.6 billion euros ($16.8 billion).
Volumes for passenger car and light truck tires in Europe were unchanged in May compared with a year earlier, the Clermont-Ferrand, France-based company said late yesterday on its website. Volumes for original equipment rose 6 percent in North America, 20 percent in Brazil and 11 percent in China.
“The figures confirm the upwards trend observed in the previous month,” said Thomas Besson, an analyst with Kepler Cheuvreux who recommends buying the shares. “Management sent a reassuring message on full-year 2013 outlook” during a call with Chief Financial Officer Marc Henry on June 12, he said.
Michelin said on June 10 it would end production of heavy-truck tires at its Joue-les-Tour factory in France, eliminating 730 jobs at the site and trimming excess capacity amid slumping demand in Europe.
The tiremaker’s plants are currently using 50 percent to 60 percent of capacity for truck tires and 70 percent for passenger cars and light trucks, Michelin Chief Executive Officer Jean-Dominique Senard said on May 17. The company is seeking growth outside Europe and expanding offerings of tires for large vehicles such as mining equipment.
To improve its competitiveness in France, Michelin plans to spend 800 million euros by 2019 in its home country, the company said. The manufacturer employed about 24,000 people in France at the end of 2012, or 22 percent of its global headcount. It also wants to expand flexible-work rules to all its 17 factories in France in the coming 12 months.
To contact the reporter on this story: Mathieu Rosemain in Paris at email@example.com