Michelin downgrades 2024 volumes forecast on specialities dip

St. Louis, Missouri – Michelin expects its 2024 volumes to be lower than previously estimated, due largely to softer-than-expected demand in the 'specialities' segment.

During an investor presentation at the US investment bank Stifel 7 Jan, the tire & rubber products maker said it now expects 2024 volumes to come in 4-6% below the prior-year level.

Previously, the French group had projected a decline of between 2-5% year-on-year.

The outlook remains unchanged for passenger car and light truck (PC/LT) as well as truck & bus tires: both segments expected to report volume changes of between 2% growth and 2% decline.

The 'specialities' segment includes mining, off-road, two-wheel and aircraft tires as well as 'polymer composite solutions'.

It is now expected to report a decline in volumes of 1-5% year-on-year, against previous estimates of 0-4% decline.

In the PC/LT segment, Michelin noted a decline in OE demand overall: accelerating in the third quarter, particularly in Europe.

Replacement markets showed “moderate growth” which is expected to continue in all regions except China – potentially supported by the winter season in Europe.

OE truck tire demand was down on a high 2023 comparison basis in both North America and Europe, while replacement sales saw “slight growth” on solid goods-transport demand.

Here, Michelin said “massive imports from Asia into North America” during the first half are expected to normalise in the second half of the year.

In specialities, mining tires maintained fundamental demand levels but gradual customer inventory drawdown continued until year-end.

Michelin noted a “strong decline” in off-road tire OE demand, while replacement sales were “slightly negative on a challenged and uncertain economic context.”

Two-wheel tires posted moderate market growth in all regions, and were more buoyant in the Americas.

Growth normalised for aircraft tires and returned to pre-Covid reference base, with significant rebound in China.

'Polymer composite solutions', which include conveyor belts and other materials solution reported “overall soft markets” due partly to a high 2023 reference base and destocking across many industries.