Michelin released its financial results for the first half of 2025 on July 24, which offer a clearer picture of how global market conditions are affecting the tyre industry, as well as what’s shaping tyre market trends in 2025, particularly for the replacement channel.
While the company faced a sharp drop in original equipment (OE) demand and rising competitive pressure from budget tyre imports, Michelin leaned into its value-driven strategy, premium product mix, and localised supply chain to maintain margin strength. But the report also points to growing headwinds for tire dealers: replacement volumes propped up by low-cost imports, eroding price discipline in commodity segments, and increasing pressure to differentiate with premium offerings.
OE Pullback Dominates Market Landscape
Tyre volumes were down 6.1% year-over-year, with OE accounting for 85% of that decline. The most significant volume losses came from truck and agricultural OE segments, driven by economic uncertainty, soft equipment demand, and cautious fleet ordering patterns.
For tyre dealers, this is important because a slowdown in OE can delay the replacement cycle, especially in heavy-duty and agricultural applications. Dealers serving these sectors may need to adjust inventory planning and be conservative in forecasting demand into early 2026.
Replacement Tyre Markets Remain Resilient
While OE struggled, replacement sell-in markets held up relatively well, particularly in the passenger and light truck (PC/LT) segment. However, this apparent resilience came with a sharp rise in imported budget tyres, especially in Europe and North America, which is reshaping the dynamics of the replacement tyre market.
