Michelin: 'Tire markets weighed down by weak OE demand'

Clermont-Ferrand, France - Tire markets delivered a mixed performance in the first half of 2025: OE sales lagging but replacement demand holding steady, according to a Michelin review.

Passenger car and light truck (PC/LC) tire volumes, it said, rose 2% overall versus the first half of 2024, led by a 3% gain in replacement sales, while OE sales were flat year-on-year.

Meanwhile, the global truck tire market, excluding China, edged up 1% year-on-year, with OE down 5% and replacement up 2%. said the French group's 24 July report.

In the PC/LT tire market, Michelin said global OE demand “varied by region” but ended the first six months of the year unchanged.

The biggest OE market declines were in Europe, down 8% year-on-year and North America, down 5%, as “economic and regulatory uncertainties” hit consumer spending.

By contrast, China recorded a 10% increase in demand, buoyed by government incentives for new-vehicle purchases and strong export sales.

Half of all new-vehicle sales in China during the period were electric or hybrid, underscoring the country’s “clear lead” in new-energy vehicles.

In Europe, the rate of decline eased from 11% year-on-year in the first quarter to a 5% dip in the second quarter, though purchasing power erosion and regulatory uncertainty continued to weigh on demand.

In North and Central America, a 5% decline persisted in both quarters, with high tariff threats and a slowing transition to EVs dampening market activity.

Demand for PC/LT tires in Asia excluding China fell 2%, while Africa, India and the Middle East gained 3%.

In replacement consumer tire markets, passenger car tire demand rose 3% year-on-year globally, continued the Michelin report.

China, it said, was “stable” in a weak economy, while Europe grew 5% on strong winter tire sales and higher imports from Asia in an uncertain regulatory environment.

Replacement demand in North and Central America rose 2% despite tariff uncertainty. Asia excluding China grew 1%, while Africa, India and the Middle East demand rose 2%.

Truck & bus

In China, where Michelin said its presence is “negligible”, OE truck & bus tire market grew by 7% year-on-year on export demand, while replacement slipped 1%.

In Europe, OE demand fell 4%, while the market in North and Central America fell 19% year-on-year, as political and economic uncertainties left fleets reluctant to invest.

South America registered a 5% decline compared to the same period last year, hit by Brazil’s high interest rates, currency weakness and softer trailer demand.

Replacement truck & bus tire demand was up 4% in Europe and North America, supported by imports ahead of possible anti-dumping action.

South America dipped 1%, with Argentina staging a “strong recovery” but Brazil dragging regional growth.

In the speciality tires segment, mining tire demand “remained robust” over the long term, Michelin said, with modest growth in first half as operators kept inventories near normal.

Markets for agricultural, infrastructure and materials handling tires were “evenly balanced” between OE and replacement, the review noted

But OE sales fell as farmers deferred equipment renewals and construction confidence stayed low, though second quarter 'hinted at improvement.'

Replacement demand was broadly stable, with European markets “resilient” and North American agricultural sales helped by government incentives.

In aircraft tires, commercial aviation markets continued to grow despite aircraft delivery delays, as passenger traffic gains prompted airlines to expand their fleets.