Michelin tracks dip in OE demand, replacement market pick-up

Clermont-Ferrand, France – Michelin Group has noted a reversal in the OE passenger car/light truck (PC/LT) tire market, due partly to a slowdown in demand for electric vehicles.

During the first nine months of 2024, global OE tire demand fell 3% year-on-year, reflecting a 6% contraction in Europe, a 1% dip in North America but 1% growth in China. 

However, all three regions saw significant declines in the third quarter of this year, according to the analysis issued 23 Oct by the French-based tire major.

In Europe, the market downturn already observed in the first half of this year gained momentum in the third quarter, which ended down 9% year-on-year.

The third-quarter trend also reflected a “tapering off” of OEM inventory rebuilding after strikes in the autumn of 2023, which buoyed demand in the first half of 2024.

The decline tracked new-vehicle sales, which were hit by low demand due to high interest rates and by uncertainties over the pace of the market’s transition to EVs.

Moreover, added Michelin, the pace of adoption of battery-electric vehicles “seems to be slower than expected, creating relative uncertainty among automakers.”

In China, demand continued to be driven by exports and the take-up of EVs, rising by 1% over the first nine months of the year.

However, this overall gain masked a 3% year-on-year contraction in the third quarter, due to a fall-off in domestic demand amid persistent weakness in the Chinese economy.

Relacement markets

In the global replacement market, demand for light vehicle tires rose 3% year-on-year over the first three quarters, with a similar level of growth seen in the third quarter.

European demand climbed 7% over the first nine months of 2024, with an 8% increase in the third quarter, supported by growth in sales of 18-inch and larger tires.

Demand in North America rose 3% over the first three quarters, with a less favourable 1% gain in the third quarter – due in part to low-cost imports.

In China, demand declined 1% year-on-year in the first nine months, with a steeper 5% drop in the third quarter due to sluggish domestic demand.