European distributors are holding back from buying costly winter tyres due to high inventories, Finland’s Nokian Tyres said on Thursday, adding it saw weakness in its Russian market too.
“We expect short-term weakness in sales volume throughout Central Europe to continue during the remainder of the year,” Chief Executive Hille Korhonen told an investor call.
Korhonen said summer tyre inventories in Central Europe were higher than normal, leading distributors to hold back on stocking winter tyres.
“So it seems that the order intake is slower compared to many, many years and they will be ordering goods closer to the season,” Korhonen said, adding oversupply was putting pressure on prices.
Korhonen said the company’s view on the Russian market had worsened through the year.
“There is increasing uncertainty in the Russian market and my meetings with all key distributors in Russia earlier this month confirmed the weakness,” Korhonen said.
Shares in Nokian were 3% lower in late trading.