Michelin Group reported its first-quarter 2024 sales were down by 2.7% with as- expected soft volumes — though the tiremaker said the market showed demand for replacement passenger and light truck tires, especially in North America and China.
Michelin’s overall tire volumes were down 4.1%, which is blamed on weakness in certain markets: construction tires, agricultural tires and mining tire inventory drawdowns. The company said the decrease was also due to its “ongoing value strategy focused on the most value-accretive segments.”
Sales for the quarter totaled more than $7.167 million — down 4.6% from $7.570 million a year ago.
Michelin breaks its tire sales into three large categories: automotive largely covers the passenger and light truck tire markets. Road transportation includes commercial truck tires and the specialty businesses categories includes mining, farm and other off-the-road tire sales.
For the first quarter of 2024, sales in all three categories were down compared to the same period in 2023, with automotive down 2.4%, road transportation down 6.0% and the specialty businesses down 7.6%.
Price-mix resulted in a positive of 0.7%, with any negatives offset by gains with the focus on the Michelin brand “in every segment,” as well as the growth in the passenger and light truck tire categories for tires 18 inches and larger. “The geographic mix was also favorable, with demand rising faster overall in the North American and Chinese markets.”
In the automotive segment, volumes were down 1.1% in the quarter, with flat OE tire sales and a drop in replacement tires, “particularly in 17-inch and smaller tires and in the lower-value brands.” Pricing in the OE business was affected adversely “by the delayed application of pricing clauses indexed to raw materials and other costs, which declined over the reference period.”
Michelin said in the PLT tire category, “the mix effect was highly favorable, lifted by sustained growth in the proportion of 18-inch and larger tires in the sales mix (63% of Michelin-branded volumes sold during the first half of 2024,)” plus favorable growth in North America and China.
In the truck tire business, Michelin’s global volumes fell by 5.8%, though the tiremaker noted sales of its fleet services were unchanged in the quarter.
In the specialty category, there were declines in mining as well as what Michelin called the “beyond-road tires” — a term that it said applied to agricultural, material handling, quarry, construction, defense and powersport tires. But in that “beyond-road” category, while construction tire volumes were down, the ag-related tire products were positive, “particularly in North America.”
For the full year, Michelin is expecting overall global tire volumes to be in the range of flat to down 2%. The tiremaker is calling for segment operating income of around $3.7 billion for 2024.
