ST. LOUIS — Michelin Group expects its 2024 volumes to be lower than previously estimated, due largely to softer-than-expected demand in the "specialties" segment, including mining, off-road, two-wheel and aircraft tires as well as "polymer composite solutions."
During a recent investor presentation at the U.S. investment bank Stifel Financial Corp., Michelin said it now expects 2024 volumes to come in 4% to 6% below the prior-year level. Previously, firm had projected a decline of between 2% and 5%.
The forecast shows Michelin expects a slight drop in pre-tax operating profit, to $3.54 billion, from earlier forecasts. That figure also is 5.5% below the 2023 earnings.
Michelin's outlook for the passenger/light truck and truck/bus tire categories remains unchanged: both segments expected to report volume changes of between 2% growth and 2% decline.
That contrasts with the specialties segment, where Michelin now expects to report a decline in volumes of 1% to 5%, versus previous estimates of no growth to a 4% decline.
In the PLT tire segment, Michelin noted a decline in OE demand overall, accelerating in the third quarter, particularly in Europe.
Replacement markets showed "moderate growth," which is expected to continue in all regions except China and potentially supported by the winter season in Europe.
OE truck tire demand was down in large part due to a high 2023 comparison basis in both North America and Europe, while replacement sales saw "slight growth" on solid goods-transport demand. Here, Michelin said "massive imports from Asia into North America" during the first half are expected to normalize in the second half of the year.
In specialties:
- Mining tires maintained fundamental demand levels but gradual customer inventory drawdown continued through year-end. Michelin noted a "strong decline" in OE off-road tire demand, while replacement sales were "slightly negative on a challenged and uncertain economic context."
- Two-wheel tires posted moderate market growth in all regions, and were more buoyant in the Americas.
- Growth normalized for aircraft tires and returned to pre-Covid reference base, with significant rebound in China.
- Polymer composite solutions, which include conveyor belts and other materials solution reported "overall soft markets" due partly to a high 2023 reference base and destocking across many industries.
