Michelin notes improving OE demand amid steady car tire markets

Clermont-Ferrand, France – Michelin has seen the number of passenger car tires sold worldwide increase 1% year-on-year over the first nine months, reflecting stable demand in the replacement segment and a 7% gain in OE demand.

Worldwide, OE demand rose particularly sharply during the third quarter at 26%, to reverse a negative trend registered in the first half of the year, Michelin said in its interim report issued 26 Oct.

The third-quarter increase, said the French group, was driven by “very favourable” prior-year comparatives and by improvements in the semiconductor and other supply-chains.

OE demand in Europe climbed 26% during the quarter, after contracting by around 8% in the first half, primarily due to the disruptions in automotive supply-chains brought about by the Ukraine war.

Nevertheless, the figure remained 19% below third-quarter 2019 levels, Michelin noted.

The European replacement market saw a “1% slippage” in the third quarter, partially offsetting a 7% increase registered in the first half. Over the nine months, replacement figures were up 5% year-on-year.

Michelin recorded two positive summer months in July and August in Europe, but demand fell 7% year-on-year in September on “unfavourable comparison bases due to price increases implemented on October 1st, 2021.”

In China, a resurgence of Covid-19 in April and May caused OE demand to hit new lows before rebounding sharply in June as health restrictions were lifted. Demand remained robust in the third quarter, with a 29% year-on-year gain.

Increased demand, said Michelin, was driven by new Chinese government car-purchase incentives and fast-growing EV sales. These factors helped to push the market up 19% on third-quarter 2019.

Over the first nine months, Chinese demand was 12% below 2021 levels, said Michelin. OE demand fell 16% in China in the first half, due to mobility restrictions in the wake of the spring lockdowns.

Demand in the country, said Michelin, is “gradually recovering” with a 3% contraction in the third quarter.

After delivering 5% growth in the first half, the North and Central American market ended the first nine months up 11%, amid “persistently low new vehicle inventory”. Compared to third quarter 2019, OE demand in the Americas was down 7%.

The North and Central American market slipped 2% over the first nine months, reflecting a 7% decline in the third quarter, after gaining a slight 1% in the first half.

According to Michelin, the sell-in market mix in Americas has been temporarily impacted by rising Asian import volumes as global supply-chain constrictions eased.

Other regions saw “sustained growth” in demand, with increases of 10% in Asia excluding China and of 5% in South America over the first nine months of the year.