Michelin Group posted sales of $21.8 billion during the first nine months of 2024, 4.6% less than during the same period in 2023.
However, Michelin reports that “tire sell-in markets rose over the period, inflated by high imports of Asian tires into replacement markets,” particularly in North America and Europe. But original equipment tire demand “deteriorated gradually,” showing a 5% decrease in North America and a 9% decline in Europe.
Sales of 18-inch and larger consumer tires remained bright spot for the tiremaker during the first three quarters of the year.
Commercial truck tire markets “outside China reflected moderate economic growth, with North America inflated by massive imports of Asian tires in the first half,” according to Michelin officials. Demand for commercial truck tires in the OE channel was “weak throughout the year,” with third quarter demand down 14% in North America and some 23% in Europe.
The specialty tire market, which includes ag and OTR tires, among others, saw mixed results during the first nine months of the year, with OE agricultural and construction tire demand falling “sharply. Mining (tire) demand was soft due to gradual inventory drawdowns.”
Volumes
Michelin Group experienced a 5.3% overall decline in volume during the first three quarters of the year, but enjoyed a 1.7% increase in price-mix as the impact of pricing “eased considerably,” according to Michelin officials.
The company placed “priority focus on the Michelin brand in every segment” during the period. “The market mix was also favorable, with replacement sales volume proving more resilient than OE volumes.”
North American performance
In the PLT segment, replacement tire demand in North America grew by 3% during the first nine months of 2024, “with a less than favorable 1% gain in the third quarter alone.” Michelin officials theorize that the third quarter slowdown “may reflect the leveling off of Asian import sales.”
In the OE channel, “markets in North and Central America edged back by 1% overall compared with the first nine months of 2023, with a sharper 5% decline in the third quarter. The latter primarily reflected the tapering off of OEM inventory rebuilding after the fall 2023 (United Autoworkers) strike, which buoyed demand on the first half of 2024.
“Moreover, the pace of adoption of battery-electric vehicles seems to be slower than expected, creating relative uncertainty among automakers about the strategy to be pursued. In contrast to the post-pandemic period, when carmakers focused on executive models, the North American market also saw a shift to lower trim models, with fewer features and less equipment, as consumer purchasing power remained under pressure.”
In the commercial truck tire segment, replacement demand “ended the first nine months up 11%, as the highly robust, more than 15% growth through end July, driven by the massive imports ahead of anti-dumping duties for products coming from Thailand, was off-set by corrective declines in August and September.”
In the OE channel, demand for commercial truck tires in North America declined by 20%, while demand in Central America fell by 11%. Michelin officials attribute the drops from the introduction of the “new emission standard that had spurred a wave of early buying throughout 2023, especially in the second half.”
Specialty tires
Demand for OE ag tires during the first nine months of the year “feel steeply in both the Americas and Europe, dragged down by adverse weather events and the reduction in average farming income following the erosion in farm commodity prices.”
And the replacement ag tire market “remained roiled by the growing penetration of noon-pool brands, particularly in the Americas.”
Demand for “infrastructure tires” contracted during the first nine months versus the same period in 2023, driven by slowdowns in home building, especially in Europe. “Business was more resilient in North America.”
The material handling tire segment “edged up somewhat, thanks to a slight upturn in port operations in both Europe and North America,” while demand for mining tires “remained short of ... fundamentals due to inventory drawdowns by mining operators at a time of higher interest rates and a sharper focus on cash flow. Destocking is expected to continue throughout the rest of the year.”
