_324 2023 UNIVERSAL REGISTRATION DOCUMENT_MICHELIN 5 FINANCIAL PERFORMANCE Report of the Managers In Europe, the market rose by 11% over the year, buoyed by favorable prior-year comparatives. This was particularly the case in the first half, when demand climbed 14% compared with the 2022 period, which was adversely impacted by automaker supply shortages and the outbreak of the war in Ukraine. The market gained a further 7% in the second half, during which most automakers completed the process of replenishing their vehicle inventories. Nevertheless, the European market ended the year well below its 2019 level, with an 18% shortfall. The North American market expanded by 9% in 2023, led by sustained new car demand throughout the year. The automaker strikes called in late third quarter and early fourth quarter weighed somewhat on second-half growth (up 6%), although they did not prevent automakers from rebuilding their vehicle inventories. Nevertheless, the North American market ended the year 5% down on 2019. The market in China improved by 9% over the year, with wide swings from one quarter to the next. The 7% overall gain in the first half, for example, reflected a 6% drop in the first quarter, stemming from the high inventory overhang from year-end 2022, and a 22% rebound in the second three months due to the favorable comparison with second-quarter 2022, when the health crisis re-emerged in April and May. As well, the second half’s 11% growth comprised a slight 2% increase in the third quarter from high prior-year comparatives, which were boosted by the lifting of health restrictions in June and by government new car rebates, and a sharp 21% upsurge on favorable prior-year comparatives in the final three months, driven by rising exports of domestically manufactured EVs to the rest of the world. EVs accounted for around 30% of new vehicle sales in 2023, up more than five points year-on-year. THE OE PASSENGER CAR AND LIGHT TRUCK MARKET IN EUROPE (in millions of tires – moving 12 months) Michelin estimates. THE OE PASSENGER CAR AND LIGHT TRUCK MARKET IN NORTH AMERICA (in millions of tires – moving 12 months) Michelin estimates. Replacement In Replacement tires, the stability of global demand compared with 2022 hid significant disparities by region, with brisk growth in China offsetting a decline in Europe. Passenger car and Light truck tire markets Replacement (in millions of tires) 2023 2022 2023/2022 Secondhalf 2023/2022 Fourthquarter 2023/2022 Thirdquarter 2023/2022 First-half 2023/2022 Secondquarter 2023/2022 Firstquarter 2023/2022 Europe(1) 371 385 -4% -1% +3% -4% -6% -4% -8% North America(2) 316 316 0% +9% +12% +6% -9% -8% -10% South America 79 73 +9% +7% +4% +10% +11% +18% +4% China 133 117 +13% +11% +14% +8% +16% +32% +3% Asia (excluding China) 143 148 -4% -5% 0% -11% -3% -1% -4% Africa/India/Middle East 114 111 +2% +2% +2% +2% +2% +2% +2% TOTAL 1156 1151 0% +3% +6% +1% -3% 0% -5% (1) Including Turkey and Eastern Europe. (2) Including Central America. Michelin estimates. 2023 2020 2021 2022 65 70 75 80 85 90 95 100 105 2023 2020 2021 2022 50 55 60 65 70 75 80 85
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