2023 saw extensive destocking across the value chain. What did truck tire demand look like in 2024? The Original Equipment market, which accounts for some 20% of global demand, is highly sensitive to new emissions standards, which periodically prompt operators to upgrade their fleets. This makes tire demand more cyclical, because it goes up on new truck buying in the year before the introduction of new standards and then declines afterwards. Replacement tire demand more closely tracks each region’s economic fundamentals, since trucks “carry GDP.” However, this market picture is highly distorted by the relative polarization between budget tires from Asia and premium tires, although fluctuations in shipping costs and customs duties mean that this is more or less pronounced from one year to the next. In 2024, the North American market was very vibrant in the first nine months, ahead of the higher anti-dumping duties introduced in September, but otherwise, global replacement tire demand (excluding China) was stable overall during the year. Maria-Esperanza Gaspar, Executive Vice President, Long Distance Transportation Business Line Road Transportation Serving customers with the performance of “green and tech” products and services: a lever for our selective marketing strategy What really differentiates Michelin’s solutions for the end-user? We’re developing a portfolio of solutions delivering the highest performance in the areas of safety, durability and rolling resistance. Thanks to our unique materials science expertise, a MICHELIN-brand retreadable and regroovable casing can last up to a million kilometers, which supports the circular economy. Similarly, our tire-as-a-service solution ensures that a tire is changed at the right time, which helps to reduce materials use and represents significant savings for our customers. What sets us apart is our ability to act at every phase in the tire life cycle, from choice of raw materials to recycling solutions, to reduce our environmental impact while constantly improving product performance for customers. The safety of people and freight is a major challenge for trucking companies. At a time when truck drivers are in short supply around the world, the safety and quality of MICHELIN tires, which have been acclaimed in brand studies, is an increasingly compelling argument in hiring drivers. The latest survey(1) of more than 2,000 truck fleets in five regions has confirmed user preference for the MICHELIN brand, which has a significant lead over its premium competitors in the categories of tire performance, quality and durability. How has Michelin adjusted its strategy in response to the polarization in demand between premium and budget tires? As a trusted partner, we’re targeting the most premium market segments – i.e., the fleets for whom long-lasting performance is an important criterion and who are willing to pay for high-tech tires capable of delivering it. This is far from being a niche, since this type of fleet accounts for around half of the global market. To meet these needs, 80% of our product portfolio is going to be refreshed over the next four years with tires that are increasingly more efficient and longer lasting. Geographically, our target segments are North America, Brazil and Europe, so that’s where we’re stepping up our commitment. In Asia, we’re still taking a highly selective approach, with a priority focus on the more mature country markets. This assertive marketing strategy is being supported by an ongoing shift in our industrial footprint, with capacity optimization and technological upgrades in all our plants to deploy our ambitious product plan. Will there be any new usage or transportation trends in the years to come that will enable Michelin to continue demonstrating its leadership? The road transportation industry has embarked on a far-reaching green transformation, in which Michelin is already exercising its leadership as a core enabler, by supplying low rolling resistance tires, training drivers in more environmentally friendly driving practices, and installing aerodynamic systems and route optimization modules. The major lever for further progress will be fleet electrification. Electric trucks are more demanding on tires due to their greater engine torque, regenerative braking and a higher load index, so they offer Michelin a further opportunity to demonstrate its ability to differentiate its solutions. They could account for nearly 30% of new truck sales by 2030, compared with 3% to 4% today. The tire business Turning challenges into success (1) Kantar survey, Michelin B2B 2024 Global Trucks Equity, December 2024. 01 37 2024 UNIVERSAL REGISTRATION DOCUMENT_MICHELIN
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