In this MTD exclusive, Luigi Cumo, Michelin North America Inc.’s vice president of B2B marketing, discusses the state of the replacement truck tire market, what to expect in 2025 and more.
MTD: The U.S. Tire Manufacturers Association is forecasting a healthy increase in replacement TBR tire shipments in 2024. What's Michelin North America Inc.'s take on the current state of the replacement TBR tire market in the U.S.?
Cumo: If you look at the market overall, it’s a very healthy market. It’s just below 2021 and 2022 (levels), with 2022 being a record year. It’s above 2023 and above 2020 for obvious reasons.
If we look at our dealers – and we have good information on dealer performance, sellout, etc. - we’ve seen a lot of consistency and if we look at freight demand, that also has been pretty consistent. If you remember, we saw a dramatic crash in fall of 2022, in terms of freight demand, and it took well into 2023 to recover. Then we started to see progress.
I think the difference we’ve seen versus 2023... (is) at the end of 2022, a lot of dealers still had back orders in place as the market started dropping, so they ended 2022 and began 2023 with high inventory levels. They wound that down up to the middle of last year. They’ve been a lot more conservative in not ordering more than they need. But if I look at the overall dealer market, it’s as healthy as it can be - still above where we were in 2019.
One thing I think is relevant – and it's an area where we saw significant impact – is the retread market. Contrary to what we see on the new tire side, the retread market is far below prior years, except 2020. It started improving a bit towards July and August, but had been pretty far down in the beginning of the year and I attribute that to the large influx of (imported truck) tires.
MTD: Do you think momentum in the new TBR tire market will carry over into 2025?
Cumo: We’re expecting more of the same... continued, gradual recovery. We just averted a port crisis. We had a hurricane that just crossed through our back yard. There are disruptions that could have an impact, but outside of things like that we expect to see... continued recovery of the market. I’m calling it ‘recovery’ in the context of 2021 and 2022. I think it’s more of a return to normal.
MTD: What's your take on the continued electrification of the heavy-duty commercial truck market in the U.S.?
Cumo: I think if we look at trucks, there are still significant barriers to adoption. What is the range of these vehicles? They are obviously performing better at the bottom end of the range... like last-mile delivery. As you start moving longer distances, that becomes a lot more challenging. If you go above (the) 350-to-400-mile range, that’s a significant challenge. There’s the aspect of infrastructure, (which is) limited. And then there's the aspect of cost.
If I look at the consumer side of things, that market is much better-established. The fundamentals are more in place on that side. Adoption on (the B-to-B) side will take a lot longer. Line-haul is probably at one extreme of challenges, in terms of adoption. When you think of regional applications and waste-haul, there are (more) incentives to make it work. We have to look at the market - not as a whole, but more as segments of the market.
MTD: Earlier this year at the Michelin Sustainability Summit, you cited the Michelin X Line Energy Z+ as an example of a Michelin TBR product that is ideal for not only electric trucks, but also diesel-powered trucks. How has that tire been received by fleets?
Cumo: We as a company are very well-known for our steer tires. I think the Z+ continues on that and builds on something that’s very strong with our brand, which is fuel efficiency and savings. When we launched it into the market, we had very positive reaction and good acceptance. We have a lot of new tires coming in. A lot of these tires, similar to the Z+, are not just incremental (improvements.) It’s really a dramatic change in what we are able to deliver.
