French tyre maker Michelin will close its BFGoodrich plant in Tuscaloosa, Alabama, by the end of 2028, affecting around 1,200 workers, as global tyre manufacturers continue to adjust to weaker demand, underused capacity and intensifying competition. 

The company said production at the site will be reduced in phases from early 2027, with almost all BFGoodrich output transferred to its plant in Fort Wayne, Indiana. Michelin said both sites are operating well below designed capacity, creating structural inefficiencies that are no longer sustainable. 

The decision will lead to a one-off charge of around €220 million, to be recognised in the group’s 2026 consolidated financial statements. 

Michelin said it will support affected employees individually, with discussions to be held with union representatives over separation benefits. It also said no employee departures are expected for several months while transition plans are finalised. 

The US closure follows earlier restructuring moves in Europe, where Michelin announced the closure of its Cholet and Vannes plants in France, affecting more than 1,250 employees.  

At the time, the company cited the structural transformation of the passenger car, light truck and truck tyre markets, as well as weaker European competitiveness, inflation and higher energy costs. 

This makes the Tuscaloosa decision more than a local US jobs story. It reflects a broader reset in the tyre industry, where premium manufacturers are being squeezed by lower-cost competition, changing vehicle technology and the need to concentrate production in fewer, more efficient sites. 

The issue is also relevant for Cyprus, although the island has no comparable tyre manufacturing base. Its exposure is mainly through imports, vehicle sales, garages, fleet operators and consumers. 

Cyprus remains highly dependent on imported tyres. According to World Bank trade data, the island imported around $49.5 million worth of new pneumatic tyres for motor cars in 2024, amounting to more than 965,000 units. China was by far the largest supplier, followed by the Netherlands, Germany, Greece and Italy. 

That matters because any change in global tyre pricing, shipping costs, duties or supply patterns can quickly filter through to the Cypriot market. Local tyre dealers, car importers, rental companies, logistics firms and garages are price-takers in a market shaped largely abroad. 

Demand, meanwhile, remains supported by Cyprus’ growing vehicle market. According to the Statistical Service (Cystat), total motor vehicle registrations rose 13 per cent in the first five months of 2026, reaching 23,743, compared with 21,012 in the same period last year. 

Passenger saloon cars increased by 12.5 per cent to 18,259, while used cars continued to dominate the market, accounting for 66.5 per cent of passenger saloon registrations. That is important for the tyre replacement market, as used vehicles often bring earlier maintenance needs, including tyres, brakes and servicing. 

Commercial demand is also part of the picture. Cyprus’ road-based economy depends heavily on vans, delivery vehicles, construction fleets, tourism transport and logistics operators. For these businesses, tyres are not a discretionary purchase but a recurring operating cost. 

At the same time, Europe’s tyre industry is facing pressure from Chinese imports. The European Commission launched an anti-dumping investigation into tyres for passenger cars and light lorries from China, following a complaint from EU producers. The Commission said the EU market for these tyres was worth more than €18 billion in 2024 and directly employed 75,000 people across fourteen member states. 

For Cyprus, this creates a delicate balance. Cheaper imports can help keep replacement costs lower for motorists, garages, rental companies and businesses that depend on road transport.  

However, any future EU trade measures could also affect the price of tyres entering smaller markets, particularly those that rely heavily on imported stock and have limited ability to absorb higher costs. 

The issue is especially relevant because Cyprus’ vehicle market is still expanding. As previously reported, total motor vehicle registrations rose by 13 per cent in the first five months of 2026, reaching 23,743, compared with 21,012 in the same period last year.  

Passenger saloon car registrations also increased, while used vehicles continued to account for a large share of the market, a factor that supports demand for replacement tyres, servicing and repairs. 

At the same time, the shift towards hybrid and electric vehicles adds another layer. Hybrid cars have already tightened their lead in Cyprus, with same media reporting that they made up more than half of passenger saloon registrations in the first quarter of 2026, while petrol cars continued to lose ground and electric vehicles remained below 5 per cent. 

Cyprus is therefore moving in the same direction as the rest of Europe, although at a slower pace. The island still trails northern European markets in full electric adoption, with electric vehicles accounting for just 0.51 per cent of its total passenger car fleet in 2024, according to Eurostat figures.