The French tiremaker said Friday that sales had fallen 2.9% in 2008, and 16.0% in the last quarter. Net income fell 53.8%, to 357 million euros ($459.4 million) in 2008 compared with 774 million euros ($996 million) a year earlier. The firm’s chief executive told Forbes that Michelin would slice its capital expediture in half in order to deal with the downturn.

“We plan to reduce our investment to 700 million euros ($902.5 million), or 50.0% of our average 1.8 billion euros ($2.3 billion) annual capital expenditure, a move that will help us protect our cash position during this crisis," CEO Michel Rollier said, adding that the company would also postpone some projects.

Michelin forecast the market for tires to remain depressed in the first half of this year, but said demand might pick up after that. "Tire markets will remain well below prior-year levels in the first half, before firming up as replacement market inventories are replenished and business activity begins to recover,” Michelin said. It will propose paying a 1 euro ($1.29) per share dividend for 2008.

Last year, the company had to cut back operations as it faced costs of nearly of nearly 150.0 million euros ($209.0 million) in the fourth quarter, and it also increased prices.

On Friday, Rollier said he expected lower raw-material prices, meaning last year’s price increases by Michelin would help boost profits. He ruled out any significant price increases for the first half of this year, though: “We have done all the major price increases in 2008 and have achieved what we needed from that. There isn’t going to be any significant price increase. We are going to stick to the prices we have.” (Tire Review/Akron)