Increases to Passenger Tire Shipments Cited
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WASHINGTON, D.C., August 9, 2010 – Tire shipments in 2010 are projected to increase by approximately eight percent primarily due to a 38 percent increase in Original Equipment Manufacturer (OEM) passenger tires and a five percent increase in passenger replacement tires, according to the Rubber Manufacturers Association.
Total 2010 tire shipments are projected to increase to 282 million units from last year’s 260 million. The rebound in 2010 shipments would be roughly equal to 2008’s shipment level.
The increase in tire shipments reflects an economy reemerging from the severe economic downturn coupled with the recent turnaround of the domestic automotive manufacturers and a return to established driving habits. However, high unemployment, low consumer confidence and continued depressed home values continue to weigh on the consumer.
RMA’s Tire Market Analysis Committee forecast for key categories and their respective segments for 2010 include:
- Original Equipment Passenger Tires:
Large increases in domestic vehicle production as a result of the resumption of auto manufacturer production driven by OEM incentive and financing programs will lead to a nearly 38 percent increase in 2010 shipments to approximately 34 million units. With the economy predicted to stabilize and slowly emerge from the recession in 2010, a rebound in vehicle sales and subsequent vehicle production is anticipated. This will further increase OE tire shipments in 2011 by nearly three million units to the 37 million unit level.
- Original Equipment Light Truck (LT) Tires:
This category will experience an approximate 13 percent increase, or 400,000 units, in 2010 to nearly 3.2 million units due to stabilizing economic conditions and the subsequent impact on the commercial sectors which utilize light truck vehicles. Despite a continual consumer demand preference for vehicle fitments with p-metric passenger tires in place of LT tires, a nearly 100,000 unit gain is anticipated in OE LT as the economy continues to recover in 2011.
- Original Equipment Medium/Wide-Base/Heavy On-Highway Commercial Truck Tires:
Given the severe economic conditions in the commercial sector in 2009 depressing OEM truck sales, a nearly 16 percent increase is forecast for 2010 to approximately 2.8 million units. The continued economic rebound and pent up demand for vehicles is projected to result in a net gain of approximately 800,000 units increase in shipments in 2011.
- Replacement Passenger Tire:
Due to faster recovery in the auto sector from the protracted and deeper economic downturn in 2009, the market will realize a better than expected five percent increase in 2010, or approximately 10 million units, reaching a level of 199 million units. Growth is anticipated to continue in 2011 with the replacement sector estimated to increase by a modest twote million units.
- Replacement Light Truck Tire:
This segment represents a core group of consumers and the small commercial vehicle market – mainly “class 3” trucks. As such, the extension of the first-time homebuyer’s tax credit provided a temporary boost to the housing/construction industry allowing for a nearly three percent increase in the forecast for replacement LT tire shipments for 2010 reaching the 28 million unit level. No further changes to this level is anticipated in 2011 primarily in line with future changes to the housing industry
- Replacement Medium/Wide-Base/Heavy On-Highway Commercial Truck Tires:
The market will realize an increase of approximately 15 percent, or nearly two million units in 2010 to approximately 15 million units total as a result of the better than expected recovery in the commercial sector. However, given the uneven economic rebound forecast going forward, this market is expected to increase by approximately 600,000 units in 2011.
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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’s Tire Market Analysis Committee is comprised of tire market professionals representing the major U.S. tire manufacturers, which account for more than 90 percent of all U.S. tire shipments. Their analyses and forecasts of current and future industry activity include a review of RMA tire industry and economic data, government trade figures, and vehicle sales and production. TMAC develops its consensus view for tire demand from this process. The views expressed in this release are not the sole opinion of any one committee member, member company, or RMA representative.