Michelin Reports Sales Decline

Michelin Group's total sales fell 4.4% during the first nine months of 2025 due to an economic environment that was more challenging than expected.

The company generated $22.3 billion "following a deterioration in the third quarter, mainly related to North America," according to Michelin officials.

Overall volumes "retreated 5.5% year to date, mainly weighed down by the truck segment, which recorded a 9% contraction, including a fall of over 30%" in the original equipment (OE) channel.

"The pace of the sales decline increased in North America in Q3 compared with the first half of the year, while the rest of the Group recorded overall volume growth," say Michelin officials.

Mix was boosted by higher demand for larger tires in the passenger and light truck tire segment, "but this effect was dampened in the third quarter by the negative impact of North America."

Price remains favorable, "but has noticably softened in recent months amid a more competitive environment."

PLT deep dive

In the OE channel, global demand for passenger and light truck tires increased by 2% on a year-over-year basis, with China as "the growth driver," showing a 9% increase, but Europe falling by 6% and North America contracting by 3%.

In Asia, OE PLT demand "retreated by 2%," but there was year-over-year growth in South America, India, Africa and the Middle East, "where the Group has a less significant operating presence" than in other regions.

Looking specifically at North America, "the market declined for the nine-month period as a whole by 3%, despite 3% growth in the third quarter."

In the replacement channel, demand for PLT tires edged up 1% on a year-over-year basis during the first nine months of 2025, "with imports of low-cost tires accounting for a significant proportion of market growth in most regions."

In North and Central America, demand "inched back 1% year-on-year. As in Europe, the market was buoyed throughout the first half opf 2025 by imports of low-cost tires ahead of the introduction of additional customs tariffs. This inflow slowed in the third quarter."

In China, demand for PLT tires increased 1% due to a sharp upswing in domestic demand, while demand in Europe increased 4%.

A look at TBR

OE demand for truck and bus tires declined globally by 4% during the first three quarters of 2025, "particularly affected by the contraction in North America," according to Michelin officials.

In North and Central America, "the market slumped 20% in the first nine months overall, with no let-up in the pace of decline in the third quarter," when demand dropped by 24%. 

Michelin officials credit the downward slide to "numerous political uncertainties," as well as economic uncertainties that "made fleet managers reluctant to invest in new vehicles," plus other factors.

OE demand for TBR tires declined by 8%, with third quarter seeing a 14% drop. However, the European market remained stable. However, it showed zero growth on a year-over-year basis.

In the replacement channel, demand for TBR tires in North and Central America climbed 6%, with 10% growth in the third quarter, driven "by purchases ahead of the introduction of additional customs tariffs."

In South America, TBR demand increased by 3%, while demand in Europe "edged up 2%" overall, but showing zero growth in the third quarter because of "lackluster transportation activity," according to Michelin officials

Specialty tires

Demand for mining tires is expected to remain "robust over the long-term, thanks to ever-increasing ore mining needs to support the energy transition and technological advances."

In particular, demand for large OTR tires was high during the first nine months of the year.

Sales growth in the ag, construction and material handling tire categories "all generally continues to trend downwards. Concerning agricultural tires, many farmers had renewed their equipment in recent years and were able to postpone their investment decisions.

 "The construction tire market began to stage a slight recovery" at the start of 2025, but "remained firmly in negative territory" the rest of the year.

Full-year outlook

Michelin recently revised its income outlook for the full year of 2025.  The company expects to achieve segment operating income between $3 billion and $3.48 billion for the full year.

Michelin originally expected full-year operating income to come in at more than $3.95 billion.