How Michelin Views the Market

The global passenger and light truck tire market grew by 1% in 2025, according to a recent report from Michelin Group.

From 2024 to 2025, "demand for original equipment (OE) and replacement tires (increased) by 2% and 1%, respectively," say Michelin officials.

OE demand

"China was the main growth driver" in the OE channel, with demand up 9%, whereas Europe and North America saw decreases of 5% and 2%, respectively. Demand in Asia, excluding China (mainly Japan and South Korea) also weakened over the year, declining by 4%.

"In Europe, the (OE) market contracted for 2025, as a whole, but leveled off in the second half after a steep 8% decline at the beginning of the year. The European automotive industry continued to be weighed down by the uncertainties surrounding its necessary transformation, as well as by competition from Asian players."

The North and Central American market declined 2% year-over-year, according to Michelin officials. "As in Europe, the slowdown was more pronounced in the first six months, with a 5% contraction triggered by the major uncertainty created by the risk of high customs tariffs. The second half saw slight growth of 1%, led by buyers taking action before the termination of subsidies for EV purchases, set up during the Biden Administration, and also spurred by the fact that customs tariffs had a lower-than-expected impact on prices."

The OE market reached a "record high" in China during 2025, driven by "a public subsidies program that strongly boosted domestic demand and whose effects continued to be felt through to the end of the year," as well as "a fast-changing domestic market with electric and hybrid cars accouting for over half of total production" and "particularly bouyant levels of vehicle exports."

A look at replacement

Demand for replacement PLT tires was stable in North America during 2025, according to Michelin officials. "While there was a modest 1% increase in the first half, led mainly by imports of budget tires ahead of the introduction of additional tariffs, the second half saw a slight 1% contraction, as well as continued high levels of imports. North America's dealers have high inventories of imported tires, as in Europe, but this does not directly concern the (Michelin) Group's brands."

Demand in Europe "was more or less stable for the year as a whole, with a 1% increase. The structurally more dynamic segments of the market posed strong growth again in 2025, such as tires in the 18-inch and larger and all-season categories. Demand for winter tires increased slightly despite a high basis of comparison with 2024 and a slight slowdown in the fourth quarter. The regulatory environment in the region was uncertain during the year."

China saw the biggest increase in replacement PLT tire demand with 2% growth overall, including a 4% gain during the second half of the year "when trends were much more dynamic. The government's public subsidies program helped boost domestic demand, which was still lackluster at the start of the year. Anothr major market factor in 2025 was the fast-changing distribution structure, with a greater weighting of online sales."

Demand in 2025 was slightly down in South America, "retreating 2% despite a rebound in Argentina," according to Michelin officials. "However, it rose slightly in Asia, excluding China and in India and the Middle East."

Truck tire market

Michelin believes the global commercial truck tire market, excluding China, "improved by a slight 3% in 2025, with OE sales declining by 4% and replacement demand growing by 4%. In China, where the Group's presence is negligible, markets grew by 5% year-over-year, including growth of 17% in the OE segment and a decline of 1% in replacement."

The OE TBR market in North and Central America "reached an all-time low, plummeting 20% in 2025, with the pace of decline continuing steadily throughout the year. This downsizing reflects two main factors: numerous political uncertainties, including the reconsideration of planned environmental regulations and economic uncertainties that made fleet managers reluctant to invest in new vehicles," as well as the fact that manufacturers had "stockpiled trucks, which they need to sell off before they can increase their pace of output."

In Europe, the start of 2025 was marked "by the end of the normalization process that had shaped the whole of 2024. Demand reached its lowest point in the first quarter of 2025 before picking up again in the second quarter and accelerating in the second half with a 9% increase. Overall growth came in at 2% for the full 12 months."

In South America, demand fell 13% in 2025, "with the situation deteriorating significantly as the year progressed" and dropping 26% during the fourth quarter. "Brazil's economic situation, already dragged down by high interest rates and sharp (monetary) depreciation ... deteriorated even more since the summer and the introduction of high customs tariffs on its exports to the United States."

In the replacement channel, TBR tire demand climbed by 5% in North Amercia. "Against the backdrop of subdued transportation activity, the market was buoyed by the automatic carry-over of weak demand in the OE segment and sell-in purchases made ahead of additional customs duties."

Demand for replacement TBR tires in South America increased 8% on a year-over-year basis, with the "benefits of this rebound mainly being felt by Asian players, who are taking advantage of the market opening up and are increasing their penetration rates."

In Europe, demand increased by 2% last year, which got off to a strong start "boosted by a high level of imports, mainly due to the postponement of American shipments, as well as contained shipping costs and the weaker U.S. dollar against the Euro. Demand then gradually slowed, landing at a level more in line with the stagnant transportation activity seen in the region."

TBR tire demand grew by around 2% in other markets, including a 3% gain in India and the Middle East.

Specialty tires

Global growth in demand for mining tires increased around 4% in 2025, driven by an uptick in demand for copper and gold. "Tire inventories at mining operators were at healthy levels and even reduced slightly over the course of the year," according to Michelin officials.

"Replacement markets for specialty tires were slightly higher overall in 2025 than in 2024. The market for agricultural tires edged up year-over-year. The construction market also trended upwards, propelled by the infrastructure segment in North America, which was buoyed by high volumes of purchases by U.S. dealers ahead of the introduction of additional customs tariffs. The market for material handling tires contracted slightly both in Europe and North America."