Michelin Forecasts 6% to 8% Sales Decline Amid Tariff Uncertainty

Michelin, the French tire manufacturer, has announced that its first-quarter sales are expected to fall slightly below market expectations. This projection is attributed to more pronounced seasonal factors in the first half of 2025 than initially anticipated. The company highlighted that tariffs imposed by the United States could exacerbate market volatility, but its localization strategy is expected to play a crucial role in mitigating these impacts.

Michelin operates multiple production facilities across North America, employing over 23,500 workers in the United States and Canada. The company has two factories in Mexico (Queretaro and Leon) and three in Canada (Pictou, Bridgewater, and Waterville). The management team noted that the analysis of recent administrative orders in the United States is still ongoing and that no definitive conclusions can be drawn at this stage.

North America, including Mexico, accounted for 38.6% of Michelin's total annual sales in 2024. The company's management emphasized that the impact of tariffs on finished goods flowing into the United States from other regions remains uncertain. Key products affected include agricultural tires from Europe to the United States and secondary passenger car tires from Indonesia to the United States. Michelin also noted that the United States is not a significant exporter to Europe and Asia, limiting the potential impact of retaliatory tariffs from non-U.S. countries.

Given the current volatile environment, Michelin has chosen not to provide any forward-looking statements at this time. The company will release its first-quarter sales data later this month and is expected to confirm a 6% to 8% decline in sales volume due to reduced automotive demand at the end of 2024. Analysts, based on market expectations provided by the company on February 17, had forecasted an average quarterly sales figure of 66.7 billion euros (73.3 billion USD), with a 2.6% decrease in sales volume.

Michelin's management also addressed the tariffs imposed by former U.S. President Donald Trump, stating that 70% of the tires sold in the United States are produced domestically. The company further noted that natural rubber has not been affected by recent announcements and that the United States is self-sufficient in synthetic rubber production. Michelin is scheduled to release its first-quarter financial results on April 24.