A slow start to the year at Michelin

At a conference with investors last night, Michelin announced that its sales for Q1 2025 are expected to fall slightly short of the market consensus, due to greater-than-expected seasonality in the first half of the year.

The French tire manufacturer pointed out that the tariffs imposed by the United States would contribute to increased market volatility, while asserting that its strategy of local production for local markets would be a valuable asset in coping with them. Michelin employs over 23,500 people at its production sites in the United States and Canada. The company also has two plants in Mexico, in Querétaro and León, and three in Canada, in Pictou, Bridgewater and Waterville. In 2024, the North American market, including Mexico, accounted for 38.6% of total annual sales.

Group management clarified that recent US executive decisions were still being analyzed, and that no definitive conclusions could yet be drawn.

"Flows of finished goods from other regions to the US could be affected by the 25% tariff that applies to automobiles and auto parts, although it remains to be confirmed whether all types of tires are affected," Michelin said. "For Michelin, the main flows are those of agricultural tires from Europe to the United States, and Tier 2 passenger tires from Indonesia to the United States".

Regarding possible retaliatory tariff measures by other countries, Michelin believes that "the story is just beginning". The group added that the United States represented a weak export market for Michelin, with very limited shipments to Europe and Asia.

"In the current, particularly volatile environment, we will not formulate any outlooks at this stage. We will reserve them for the publication of our first-quarter results later this month", management added.

Greater than expected fall in Q1

Michelin expects volumes to fall by between 6% and 8% in Q1, in line with the decline in automotive demand observed after the end of 2024. In comparison, analysts were anticipating average quarterly sales of €6.67bn and a 2.6% drop in volumes, according to a March 17 consensus provided by the company.

Regarding the tariffs decided by US President Donald Trump, the group pointed out that 70% of the tires it sells in the United States are also manufactured there.

Finally, Michelin stressed that natural rubber was not affected by the recent announcements, and that the United States could be considered self-sufficient in synthetic rubber production.

Q1 results will be published on April 24.

The stock is underperforming the market, while benefiting from the general rebound on the morning of April 10: +3.5% vs. +6% for the CAC40. We could find no trace of any wider dissemination of this investor conference, which once again raises the question of the transmission of important information through a privileged channel.