Market situation

Financial Statement Release 2016

The global recovery continues. As we enter 2017, all regions are showing positive development. In 2017 and 2018, the rate of growth is estimated to be slightly higher than in previous years. It is estimated that the global GDP will grow by 3.3% in 2017 (3.1% in 2016). The GDP growth estimates for the Nordic countries are from +1.0% to +2.3%, for Europe (including the Nordics) +1.3%, and for the US +2.1%. In Russia, the GDP is estimated to grow by approximately 1%.

In Europe, the sales of new cars increased in 2016 by 7% year-over-year. Car tyre sell-in to distributors was up 2% year-over-year, with winter tyre demand increasing by 3%. Overall, tyre demand is estimated to grow slightly year-over-year in Central Europe in 2017. Rapidly growing raw materials costs will force the global tyre industry to increase prices in 2017.

In the Nordic countries, new car sales increased in 2016 by 7% year-over-year. The market volume of car tyres was flat year-over-year. For the full year of 2017, car tyre demand is estimated to remain at the same level year-over-year.

In the US, the estimated new car sales were up by 0.6% in 2016 vs. 2015. The market volume of car tyres was up by 1.4% year-over-year. However, demand for winter tyres decreased. For the full year of 2017, car tyre demand is estimated to increase slightly year-over-year.

Russia’s economic decline has slowed down but has not turned into growth yet. The economy continued to stabilize. The Russian consumers’ confidence and purchasing power continued to gradually improve, but still remain at a low level. The sales of new cars in 2016 continued to decrease: the whole year showed a decline of 11% and December was down by 1% vs. the same period last year. In 2017, the new car market is expected to return to growth. For the whole year 2017, the new car sales is expected to grow in the range of 5–10% vs. 2016. The total replacement tyre market sell-in in Russia declined in 2016 by approximately 5%. In 2017, the tyre market is expected to grow by 5–10% vs. 2016.

The global demand for special heavy tyres continued to vary strongly between products and market areas in 2016. OE forestry tyre demand remained strong. The increased use of wood and the good profitability of pulp manufacturers will also support forestry machine and tyre demand during the following quarters.

In 2016, the sell-in of premium truck tyres was up by 3% in Europe, while in the Nordic countries demand was down by 3%. In Russia, the demand for premium truck tyres increased by 33% compared to 2015. Truck tyre demand in 2017 is estimated to show some increase or to remain at the same level as in the previous year in all of Nokian Tyres’ western markets; in Russia, demand is showing some positive signals.