With a downgrades in Nokian Tyres’ 2015 outlook, the Finnish tiremaker said it will decrease production and lay of workers at its Finland facility, according to Tyres & Accessories.
The economic situation in Russia and the CIS countries is said to be responsible for the decrease in passenger car tires. Tires that are purchased in the Russian market are lower B or C segment brand products.
Facing less demand, the company’s Nokia, Finland facility will decrease production as a result. The company also said statutory negotiations will begin Aug. 14 with the facility’s 900 employees as a maximum of 150 workers will be laid off if the planned adjustments are made.
“Despite the unfortunate cuts the role of our Nokian factory remains important, not only for the volumes it produces but also in developing new products and production processes,” said Ari Lehtoranta, Nokian Tyres’ president and CEO. “Our production volumes are lower this year than last year. The volumes will likely return back to growth next year, but the coming few years’ growth can be managed with the existing unused capacity.”
Nokian said its sales in Russia decreased 39.1% y-o-y during the first half of 2015.
However, the Nokian plant in Vsevolozhsk, Russia, produces about 80% of Nokian’s passenger car tires and exports 63% of its sales volume in the first six months of the year. Because production costs are in roubles and sales are in euros, the facility was in line with the company’s margins, T&A reported.