Michelin sees first-half tire markets remain weak as OE demand softens

Clermont-Ferrand, France – Michelin expects global tire markets to remain weak through the first half of 2026, with OE demand continuing to decline while replacement markets remain “broadly stable,” supported by strong regional variations.

Market trends

In a pre-close call held 2 July ahead of its half-year results, Michelin said in the consumer segment, covering passenger car, light truck and two-wheel tires, it expects global OE demand to remain “negative” during the first half, following a 3% decline through May.

The group said the sharpest contraction was in China, where domestic demand has "slowed down materially" following less attractive incentives for new vehicle purchases.

Europe and North America are also expected to end the half-year lower "in an uncertain context."

Replacement markets, however, are expected to remain "flattish" overall.

China, Michelin said, continues to show strong demand, driven by the replacement cycle for vehicles sold in recent years and supported by a favourable macroeconomic environment.

The US faces a ‘reverse trend’ but reflected the gradual reduction of the inventory surplus of Asian tires that built up in 20205.

In Europe, Michelin expects replacement demand to remain broadly stable, with lower imports of Asian tires reflecting elevated inventories and anticipated anti-dumping duties on Chinese-made passenger car tires.

Turning to truck tires, Michelin said the global OE market, excluding China, is expected to remain negative during the semester after declining around 3% through May.

Europe is forecast to post growth on a weak prior-year performance, while North and South America remain in the weaker phase of the cycle.

In North America, Class 8 truck orders have increased for six consecutive months, although Michelin noted that inventories of new trucks remain elevated and production has yet to recover.

Brazil also continues to face a "difficult economic situation" that is limiting investment by transport operators and increasing competition from Asian truck manufacturers.

Replacement truck tire demand is expected to remain positive overall, supported by Europe and South America and by higher imports.

North America, however, remains under pressure, with sell-in demand down around 15% through May due to lower tire imports and weak freight activity.

Within speciality tires, Michelin said market conditions drew a “mixed picture.”

Agricultural OE markets are improving in Europe but remain weak in North America, while replacement trends show the opposite pattern.

Infrastructure markets are "overall slightly positive", materials handling remains weak and mining demand continues to be supportive across most regions.

Aircraft markets, meanwhile, have begun to feel the effects of the Middle East conflict, with passenger traffic declining year-on-year in April and May.

Revenue outlook

Michelin expects first-half tire volumes to broadly match its initial expectations, with a "sequential improvement" through the second quarter resulting in a "slightly negative" first half overall.

Consumer tire volumes are expected to be close to flat or slightly lower in the second quarter, with OE remaining "the key drag" due to market conditions and an unfavourable vehicle mix.

Replacement volumes, the group said, should show growth, supported by Michelin-branded products, while lower-tier brands continue to face pressure from "highly stocked cheap imported tires."

In truck tires, Michelin said volumes are gradually improving and could be flat or slightly positive during the second quarter.

The “main headwind,” Michelin said, remains OE demand in the Americas, while European replacement business is expected to grow.

In speciality tires, volumes are expected to remain negative while ‘mining remains well-oriented.’

Here, the group said, ‘beyond road’ activities are “penalised by OE markets, especially agriculture in North America and aircraft [which] has seen its activity slowing down over the second quarter due to the impact of the Middle East conflict.”

Michelin expects price-mix to remain positive, although weaker than in 2025.

Within Polymer Composite Solutions (PCS), Michelin expects first-half revenue to be close to 2025 levels.

Sealing solutions and coated fabrics are expected to perform well, while conveyor products continue to face “a difficult business context.”

The company also noted that recent acquisitions, including Cooley Group and Flexitallic, will contribute positively to the group's scope in the second quarter, more than offsetting the carve-out of construction activities.

Foreign exchange is expected to remain a negative factor during the first half, driven primarily by the US dollar, although the impact should be less severe in the second quarter than earlier in the year.

On profitability, Michelin reiterated previously disclosed expectations, including a positive raw-material effect during the first half, manufacturing productivity gains and selling, general and administrative expenses broadly in line with 2025.

The company also maintained its expectation that second-half revenue will exceed first-half levels, although the operating margin ratio is likely to be slightly lower due to raw-material trends.