European Production Declines Weigh on Michelin's Figures Until March

Michelin's financial results for March concluded with €6.515 billion, a slight decline of 1.9% compared to the same period last year. According to the French company, the world's largest tyre manufacturer, this drop is attributed to lower original equipment sales across all segments.

Specifically, the brand's total tyre volumes have contracted by 7.3%, following the trend of the second half of last year. Regionally, Europe showed the largest decline, with a 13% decrease in the first quarter of 2023.

According to Michelin, "this slowdown is due to persistent uncertainty over the transition to hybrid mobility, as well as reduced purchasing power among buyers." Germany, the EU's largest car manufacturing country, saw its production reduced by 14% in the first quarter of the year.

This manufacturing decline also extended, albeit to a lesser extent, to the American continent, where Michelin's original equipment figure fell by 8%. According to the company, "the geopolitical situation [i.e., Donald Trump's tariff war] was a considerable drag on consumer confidence."

However, the setbacks were offset by China's performance, where the market grew by 10%, supported by the Government's financial subsidy programme launched in the second half of 2024. This had a positive impact on domestic demand, and its manufacturers increased exports.

The replacement market remained virtually flat compared to last year, except in China. In Europe, demand remained stable, with a modest increase of 1%. According to Michelin, "markets in Western Europe grew during the quarter, but central and eastern areas contracted due to a 23% drop in Turkey."

North and Central America fell by 3% throughout the quarter, something the company expected due to the strong results achieved in 2024, when imports from Thailand increased significantly. "The return to normal demand levels had a negative impact on retreaded tyres, which faced affordable models."

In South America, the change was in line with last year due to two opposing trends: on one hand, the Brazilian market contracted by 12%, facing a high volume of imports. Conversely, Argentina, "with an apparently clearer economic situation," recorded a rebound of 23%.