PARIS (Reuters) – Michelin reported as expected on Wednesday a drop in its quarterly turnover attributable to a fall in the North American heavy goods vehicle market which led it last week to revise downward its forecasts for annual results.
The tire manufacturer achieved third-quarter sales of 6.247 billion euros, down 6.6%, below the consensus of 6.336 billion published by the company based on nine analyst estimates.
Michelin indicated on October 13 that its 2025 sector operating profit should now be between 2.6 and 3.0 billion euros, compared to more than 3.4 billion expected so far.
He added on Wednesday that he would also renounce his 2026 objectives of an operating profit greater than 4.2 billion and an operating margin of 14%, but confirmed his ambition of a free cash flow before acquisitions of 5.5 billion cumulatively over 2024-2026.
However, the Clermont-based group still expects an increase in its results compared to 2025, the extent of which it will specify next February. During a press conference call, financial director Yves Chapot also declared that the group’s margin should increase in 2026 compared to 2025.
“In the third quarter, we had quite strong headwinds coming from North America,” he said, adding that outside this region, the group’s volumes remained up.
Michelin was faced with a host of negative factors in the United States. It terminated a contract with a struggling American wholesaler in July, which deprived it of volumes in the third quarter. “These volumes must be taken over by other wholesalers, but this transition instead of taking place in three months, will instead take place in six months,” said Yves Chapot.
The group also suffered from the postponement of American regulations tightening emissions from heavy goods vehicles and which should have encouraged the renewal of vehicles, while the American agricultural market was affected by Chinese retaliation on American soybean imports, a ricochet impact of the Trump administration’s customs duties.
A LIMIT ON PRICE INCREASES
Michelin estimates the total impact of increases in customs duties on its 2025-26 results at around 500 million euros, continued Yves Chapot.
Tuesday, during a lunch debate organized by the Automotive Industry Platform (PFA), the group’s general manager Florent Menegaux explained that all the steel cables used to reinforce tires manufactured in the United States were imported, the American surtax of 30% on steel had outbid tires produced on American soil.
He also recalled that mining tires manufactured by Michelin in the United States and exported to Canada had been hit for several months by customs duties of 25% imposed by the Canadian authorities in response to threats from Donald Trump.
To deal with these impacts, as well as the additional cost of around a hundred million euros induced by the new regulations on sustainable natural rubber, Michelin can reduce its costs and increase its prices.
“But there is a limit to what the market is capable of accepting,” said Yves Chapot. “The ‘tariffs’ arrive so unexpectedly that our teams try to adjust, to pass on (them), but do not necessarily succeed.”
Michelin’s room for maneuver on its prices, on average higher than the competition due to its premium positioning, is also hampered in Europe by “significant flows of imports of low-cost tires” from China, particularly in the replacement market for cars and vans.
“The United States is blocking what arrives from China, so there is a massive overcapacity of tires available in China,” Florent Menegaux said on Tuesday. “The only other big market is Europe. So we’re going to have a flood of Chinese tires.”
The general director of Michelin, who also observes that tire distributors have even rented additional space to store imported tires, calls on the European Commission to complete, as it has promised, its anti-dumping investigation on tires imported from Asia by the end of the year with retroactive effect until October.
(Report by Gilles Guillaume and Mathias de Rozario, edited by Augustin Turpin and Kate Entringer)
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