FRANKFURT, Germany—The German rubber industry is set for a "difficult phase" as the COVID-19 pandemic continues to impact suppliers, manufacturers and customers, industry association WDK has reported.
Tracking a downtrend started mid-2019, the sector posted lower year-on-year sales in January and February 2020, and is poised for a double-digit decline for the full year.
"The industry was then hit hard in March and April by the political and economic consequences of the (coronvirus) crisis," WDK said in a statement.
A halt in automotive manufacturing and disruptions in exports to international industrial sectors were among some of the main causes for the decline. Car makers, it noted, reacted to COVID-19 with widespread production interruptions, which were "directly transferred" to suppliers such as rubber parts makers and OE tire deliveries.
While there are "isolated bright spots," particularly in the medical technology sector, WDK predicted a declines for the full-year within the automotive and tire industries.
For 2020, WDK's best-case scenario of the German rubber industry is for a 9 percent year-on-year decline in annual sales—the figure stood at about $12.3 billion in 2019, down 4.2 percent compared to 2018.
A worst-case scenario indicates a potential 15 percent drop in revenue while the WDK scenario predicts a 13 percent year-on-year fall in sales.
The figures compare with a "zero growth" projection for the year, indicated by WDK in March.
"It is now crucial that companies in our industry survive this unprecedented crisis as unscathed as possible," WDK President Ralf Holschumacher said in a statement.
In addition to the German government's aid measures, Holschumacher called for "permanent political support" and a "partnership-based approach" across the value chain to help revive the industry.