Michelin shares skidded badly on Tuesday, falling nearly 10 per cent at one stage and wiping about €1bn off the value of the French tyre group. This followed what was tantamount to a profit warning the day before when the company turned more pessimistic and downgraded its earlier, more bullish, guidance for this year.

Back in February, the company gave an upbeat assessment of its prospects. It acknowledged that the biggest risk this year was the future of the US economy and the potential fallout from the subprime crisis. But it also suggested it saw no signs of a US recession. This was in sharp contrast to its Japanese rival, Bridgestone, which the same month painted a pretty bearish outlook for the tyre business.