French tyre manufacturer Michelin said on Monday it remained profitable in 2020 despite a pandemic-induced drop in sales, thanks in part to prices falling on raw materials.

With car sales taking a hit worldwide, Michelin also saw its sales drop by 15 per cent to €20 billion. The firm’s net profit meanwhile fell by nearly two-thirds from 2019, to €1.9 billion.

Michelin has been trying to move upmarket with a greater focus on premium tyres and specialist products, and the shift in its product mix helped earnings in 2020.

Meanwhile it cut administration costs by €240 million and cut investments by nearly a third. In January, the firm announced it hoped to shed 2,300 posts in France over the coming three years without any forced layoffs.

In January, the firm announced it hoped to shed 2,300 posts in France over the coming three years without any forced layoffs

Michelin said “in a still highly uncertain environment as the health crisis unfolds” that it expected the passenger car and light truck tyre markets to expand by six to 10 per cent this year. 

For trucks it sees an increase of between four and eight per cent, and eight to 12 per cent in speciality markets.

It hopes operating profits will jump to at least €2.5 billion next year.