FRANKFURT, Germany—The COVID-19 pandemic has left "deep marks" on the German rubber industry, and a recovery to previous levels is not expected until after 2021, according to the industry association Wirtschaftsverband der deutschen Kautchukindustrie.
The rubber sector suffered a 22 percent decline in sales to $5 billion in the first half of 2020, the WDK said.
Sales of tires stood at $1.9 billion during the first six months of the year, down 28.5 percent year-on-year, while the value of general rubber goods' sales fell 17.8 percent to $3 billion.
For the full year, the WDK said it expects the industry to shrink 17 percent versus the $12 billion posted in 2019.
Commenting on the figures, WDK chief economist Michael Berthel attributed the slump to "the disastrous second quarter of 2020."
"In April and May in particular, the shutdown, as a result of the coronavirus crisis, hit the industry with full force," he said, noting that four out of five companies experienced production stoppages and sales fell by 35 percent in the second quarter.
By around mid-year, he added, almost 60 percent of companies still were using short-time working schemes to bridge the weak demand.
Automotive suppliers, in particular, were affected by the economic recession.
"(The years) 2018 and 2019 were already difficult years in which the global vehicle market, contrary to expectations, contracted significantly," the economist said.
In addition to that, he said, other factors such as the move toward electromobility, ongoing international trade disputes and the uncertainties surrounding future cooperation with the United Kingdom influenced the market.
In the non-automotive sector, the WDK official noted a "different development" in the first half of the year.
Here, companies were able to record sales growth in the first quarter of 2020.
In the second quarter, however, the COVID-19 crisis affected business and the cumulative sales fell below the previous year's level by the mid-year mark.
In this sector, employment fell 4.6 percent to 71,900 by mid-year, due to low capacity utilization rates.
On a positive note, the WDK economist said sales orders have improved since the April low, but warned that the return to the "previous levels" will not be achieved until after 2021.
"This is a long dry spell for an industry that is only allowed a thin liquidity reserve by its powerful suppliers and customers," Berthel said.
Therefore, the WDK official called for political measures, such as the extension of the short-time work schemes as well as the introduction of "new, innovative working-time models," to be put in place to support the industry.