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RMA Forecasts 4% Drop in US Tire Shipments in 2008

U.S. tire shipments are projected to decline by nearly 4 percent in 2008 compared to 2007, according to the Rubber Manufacturers Association. Total shipments will fall below 300 million units, and OE passenger tire shipments will fall to their lowest levels since 1991. The full press release is here.

The projected drop in shipments reflects the worsening domestic economic pressures predicted for both the consumer and commercial sectors, with original equipment shipments falling by double-digit percentages. The combined 2008 original equipment and replacement tire shipments for light vehicle and truck categories are expected to fall by more than 12 million units to about 298 million total shipments, compared to 310 million units in 2007.

Replacement passenger tire shipments are forecast to fall nearly 1 percent to about 202 million units, as a slowing economy and high energy prices are affecting consumer driving habits. Demand in 2009 likely will be unchanged because of continuing difficult economic conditions.

Replacement light truck tire shipments are forecast to fall by approximately 2.4 million units, or nearly 7 percent, to about 32 million units in 2008. Although the number of vehicles for this market remains steady and largely represented by small commercial vehicles, declining economic conditions and fewer miles driven will contribute to a further projected 5 percent decline in replacement LT tire shipments in 2009.

Shipments of replacement medium, wide-base and heavy truck tires are projected to decline to approximately 16 million units in 2008, a decrease of nearly 600,000 units or 3.5 percent over 2007. Again, the decrease reflects a further weakening of the economy and protracted recovery as fewer goods are being transported.

OE passenger tire shipments are projected to decrease by more than 11 percent to approximately 41 million units in 2008 as a result of continued decreases in domestic vehicle production. This will mark the lowest level of OE shipments since 1991 when OE shipments stood at 41.8 million units. A further decrease of approximately 3 percent is expected for 2009 owing to a protracted economic recovery and continued market share gains for light vehicle imports.

OE light truck tire shipments are forecast to decline more than 35 percent to 2.8 million units in 2007, down from 4.4 million units in 2007. This sharp drop is attributable to the fundamental shift in consumer demand for vehicles with higher fuel economy, a shift in vehicle fitments to P-metric passenger tires, and market share increases by import vehicle manufacturers. For 2009, a modest 200,000 unit increase is anticipated owing to resumption of economic growth in the commercial sectors that utilize light truck vehicles.

Finally, original equipment medium, wide-base, and heavy truck tire shipments are projected to decline by approximately 12 percent to nearly 4.1 million units in 2008. This decrease is attributed to the larger than anticipated economic slowdown in the commercial sector. However a considerable rebound of more than 24 percent is forecasted for 2009 as economic activity improves and truck sales increase. Anticipation of changes in EPA regulations for 2010 will inspire a pull-forward effect of truck sales into 2009.

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