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WASHINGTON, D.C., March 7, 2008 - Tire shipments in 2008 are projected to remain at or near levels reached in 2007 as growth in the replacement markets will again be offset by declines in the original equipment (OE) tire markets, according to the Rubber Manufacturers Association.
Tire shipments for 2008 will reflect the moderate domestic economic pressures predicted for both the consumer and commercial sectors. Overall, the combined OE and replacement tire shipments for 2008 light vehicle and truck categories are anticipated to increase by fewer than one million units (less than one percent) to approximately 311 million total shipments compared to 2007’s 310.1 million units.
RMA’s Tire Market Analysis Committee forecast for key categories and their respective segments for 2008 include:
- Original Equipment Passenger Tires: For 2008, this market is projected to decrease by approximately 4 percent, or 2.2 million units to nearly 44 million units. This is a result of expected decreases in domestic vehicle production due to sales trends and a soft economic climate. This will mark the sixth consecutive year that domestic light vehicle production has decreased and the third consecutive year of decreased vehicle sales. However a nearly 4 percent increase in shipments is anticipated in 2009 as the economy stabilizes and consumers return to a more usual purchasing mode. Nonetheless, a recovery of shipments to historical levels will not be realized as light vehicle imports continue to gain market share.
- Original Equipment Light Truck (LT) Tires: Nearly 4.2 million OE units are projected to be shipped in 2008, representing a decrease of approximately 6 percent, or 300,000 units versus 2007. The decrease is attributed to reductions in domestic vehicle production that have occurred in the current economic slowdown. Historical levels of light truck OE shipments will not be obtained due to a shift in vehicle fitments with P-metric passenger tires and market share increases by import vehicle manufacturers.
- Original Equipment Medium/Wide-Base/Heavy On-Highway Commercial Truck Tires: This category is forecast to rebound slightly in 2008 by just over 1 percent to approximately 4.7 million units. This slight increase is attributed to a soft economic climate in the commercial sector, which is not expected to improve until the fourth quarter of 2008. However a significant rebound of over 20 percent is forecasted for 2009 as truck sales resume normal levels and economic activity improves. In 2007, this sector experienced a nearly 32 percent decrease in tire shipments as changes in EPA regulations inspired a pull-forward effect of truck sales in 2006.
- Replacement Passenger Tire: The passenger replacement market was up 4 percent to 204 million units in 2007 as a result of stronger than expected fourth quarter imports. A moderate increase of 1.5 percent, or approximately 3 million additional units, is forecasted for 2008 as the current economic environment will dampen growth for this large segment of the tire industry. A further increase of over 2 percent is anticipated in 2009 as favorable economic conditions return.
- Replacement Light Truck Tire: This market segment is forecasted to increase by approximately 500,000 units, or nearly 1.5 percent, to nearly 35 million units in 2008. Growth is attributed primarily to an expected increase in the number of vehicles in this market. However, the growth is tempered as a result of the downturn in economic conditions in the commercial light truck segment.
- Replacement Medium/Wide-Base/Heavy On-Highway Commercial Truck Tires: This market is forecast to reach 16.3 million units in 2008, a decrease of nearly 300,000 units or 1.6 percent over 2007’s shipments. Again, the decrease reflects a weaker and more uncertain economy and less movement of goods.
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The Rubber Manufacturers Association is the national trade association for the rubber products industry. Its members include companies that manufacture various rubber products, including tires, hoses, belts, seals, molded goods, and other finished rubber products. RMA members employ over 120,000 workers and account for more than $21 billion in annual sales.