Michelin reports rising OE demand

CLERMONT-FERRAND, France—Michelin has seen the number of passenger car tires sold worldwide increase 1 percent year-on-year over the first nine months, reflecting stable demand in the replacement segment and a 7-percent gain in OE demand.

Worldwide, OE demand rose sharply during the third quarter at 26 percent, to reverse a negative trend registered in the first half of the year, Michelin said in its interim report issued Oct. 26.

The third-quarter increase, said the French group, was driven by "very favorable" prior-year comparatives and by improvements in the semiconductor and other supply-chains.

OE demand in Europe climbed 26 percent during the quarter, after contracting by around 8 percent in the first half, primarily due to the disruptions in automotive supply-chains brought about by the war in Ukraine.

Nevertheless, the figure remained 19 percent below third-quarter 2019 levels, Michelin noted.

The European replacement market saw a "1-percent slippage" in the third quarter, partially offsetting a 7-percent increase registered in the first half. Over the nine months, replacement figures were up 5 percent year-on-year.

Michelin recorded two positive summer months in July and August in Europe, but demand fell 7 percent year-on-year in September on "unfavorable comparison bases due to price increases implemented on Oct. 1, 2021."

In China, a resurgence of COVID-19 in April and May caused OE demand to hit new lows before rebounding sharply in June as health restrictions were lifted. Demand remained robust in the third quarter, with a 29-percent year-on-year gain.

Increased demand, said Michelin, was driven by new Chinese government car-purchase incentives and fast-growing EV sales. These factors helped to push the market up 19 percent on third-quarter 2019.

Over the first nine months, Chinese demand was 12 percent below 2021 levels, said Michelin. OE demand fell 16 percent in China in the first half, due to mobility restrictions in the wake of the spring lockdowns.

Demand in the country, said Michelin, is "gradually recovering" with a 3-percent contraction in the third quarter.

After delivering 5-percent growth in the first half, the North and Central American market ended the first nine months up 11 percent amid "persistently low new vehicle inventory." Compared to third quarter 2019, OE demand in the Americas was down 7 percent.

The North and Central American market slipped 2 percent over the first nine months, reflecting a 7-percent decline in the third quarter, after gaining a slight 1-percent in the first half.

According to Michelin, the sell-in market mix in Americas has been temporarily impacted by rising Asian import volumes as global supply-chain constrictions eased.

Other regions saw "sustained growth" in demand, with increases of 10 percent in Asia, excluding China, and of 5 percent in South America over the first nine months of the year.