Tire Giants First Half 2026 Review
In the first half of 2026, Michelin Group's revenue reached €12.687 billion (a year-on-year decrease of 2.6% on a reported basis, with the euro appreciation contributing a 3.1 percentage point drag), representing a 0.5% increase at constant exchange rates. The consumer business (passenger car and light truck tires + two-wheeler tires) generated €6.926 billion in revenue, with an operating profit margin of 12.5%.
Pirelli's revenue for the same period was €3.4945 billion, with organic growth of +2.5% excluding the accounting effects of currency fluctuations and hyperinflation (or flat year-on-year if including all the above effects).
In terms of scale, Michelin holds approximately 11.7% of the US replacement tire market share, while Pirelli holds approximately 3%. This explains the core motivation behind Pirelli's announcement at the end of June of a $1 billion to $1.2 billion capacity investment in its Georgia plant—to expand the supply of high-value tires in North America.
Regarding pricing and product mix, Michelin's price-mix contributed a positive 0.9% to the tire business; Pirelli's price-mix contributed 2.5%.
Profitability: High-Value Tires Determine Profit Margin
Michelin Group's overall operating profit margin was 11.4%, with significant differentiation across segments: Consumer tires achieved a profit margin of 12.5%, a year-on-year increase of 0.4 percentage points; truck and bus tires reached 5.9%, also a year-on-year increase of 0.3 percentage points; specialty tires (mining, aviation, engineering, and agricultural applications, etc.) led all segments with a profit margin of 14.1%; and polymer composite solutions achieved a profit margin of 13.6%. Michelin brand replacement market sales increased by 5% year-on-year, with the newly launched Primacy 5E and Racing 5E series being the core drivers.
Pirelli's sales share of high-value tires rose to 82%, and its adjusted EBIT margin remained stable at 16%. Of the approximately 200 new vehicle certifications obtained, 90% were for tires 19 inches and larger, and 60% were for new energy vehicles.
Sustainability
Michelin aims to achieve 40% sustainable materials in its tires by 2030 and 100% sustainable materials manufacturing and net-zero emissions (Scope 1+2) by 2050. Pirelli takes a more aggressive approach: its net-zero emissions target by 2040 (range 1+2+3) has been officially validated by the Scientific Carbon Targeting Initiative (SBTi), and it aims to use over 80% bio-based and recycled materials by 2030.
Strategy: Diversification vs. Focus
Michelin is accelerating its diversification strategy of "based on tires, around tires, and beyond tires," completing three strategic acquisitions in the first half of the year: Cooley Group, Flexitallic, and Tex Tech Industries. Revenue from polymer composites reached €728 million (+14%, including M&A contributions).
Pirelli, on the other hand, focuses on global expansion in large-size, high-value sectors: continuing its exclusive tire sponsorship in F1, it is advancing the commercialization of its Cyber tire technology—which uses built-in sensors to collect tire data in real time and transmit it to vehicle electronic systems. Application agreements have been reached with high-end brands such as Aston Martin, and its planned expansion of its US plant will focus on producing high-value products equipped with this technology.
Full Year Outlook
Pirelli: Full-year revenue is expected to be between €6.75 billion and €6.95 billion, with adjusted EBIT margin remaining at approximately 16%.
Michelin: Targets year-on-year operating profit growth on a constant exchange rate and constant range basis, with pre-acquisition free cash flow exceeding €1.6 billion. Regarding tire market demand, passenger car and light truck tires (global) and truck and bus tires (excluding China) are expected to fluctuate between -2% and +2%, while specialty tires are expected to fluctuate between -1% and +3%.
