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2009 TIRE SHIPMENTS TO POST THIRTEEN PERCENT DECLINE

For more information contact:
Dan Zielinski
(202) 682-4846
dzielinski@rma.org

 Nearly 6 percent growth anticipated for 2010

WASHINGTON, D.C.November 2, 2009 - Tire shipments are projected to drop by approximately 13 percent in 2009 primarily due to sharp decreases in demand for original equipment manufacturer (OEM) passenger and commercial truck tires, according to the Rubber Manufacturers Association.

Total 2009 tire shipments are projected to decline approximately 36 million units to 246 million units. This decrease reflects the difficult economic environment for automotive manufacturers over the past year, continued low consumer confidence and high unemployment. Tire shipments peaked at 321 million in 2000.

Vehicle miles travelled is on par with 2008 levels as the domestic economic conditions for both the consumer and commercial sectors appears to have stabilized and are poised for a rebound in 2010. As a result, the tire industry is expected to realize a nearly 6 percent growth in 2010 reaching the 260 million unit level.

RMA’s Tire Market Analysis Committee forecast for key categories and their respective segments for 2009 include:

  • Original Equipment (OE) Passenger Tires: Large decreases in domestic vehicle production due to plant shutdowns will result in a nearly 43 percent decrease in 2009 OE tire shipments to approximately 22 million units. The federal government’s “cash for clunkers” program pulled forward future years’ vehicle sales into 2009, which mitigated an even steeper drop in OE tire shipments. An improving economy and a rebound in vehicle production and sales are anticipated in 2010 resulting in a nearly 8 million unit increase projected for OE tire shipments. This projection does not account for any possible changes to the auto industry from further federal intervention or consumer incentive programs.
  • Original Equipment Light Truck (LT) Tires: This category will experience an approximate 9 percent decrease, or 300,000 units, in 2009 to nearly 2.7 million units due to slower economic conditions and its impact on the commercial sectors which utilize light truck vehicles. Little or no growth is anticipated for 2010 as domestic vehicle production is projected to remain weak.
  • Original Equipment Medium/Wide-Base/Heavy On-Highway Commercial Truck Tires: A nearly 41 percent decline to approximately 2.3 million units is anticipated for 2009 – a decrease of approximately 1.6 million units. The economic rebound anticipated for 2010 along with pent up demand for vehicles is projected to result in a net gain of approximately 350,000 units.
  • Replacement Passenger Tire: Shipments will decrease approximately 12 million units to nearly 180 million units for an approximate 6 percent decline. Growth is anticipated to resume in 2010 with the replacement sector estimated to increase by approximately 4 million units, or about 3 percent, as economic conditions improve. Non-RMA imports accelerated in July and August prior to imposition of a three year Chinese import tariff on Sept. 26th. These imports are anticipated to drop off dramatically in October and remain at depressed levels through the three year period.
  • Replacement Light Truck Tire: This segment represents a core group of consumers and the small commercial vehicle market – mainly “class 3” trucks. The onset of the economic recovery has limited the impact of the decline in LT tire shipments to nearly 3 million units, or 11 percent, for a total of approximately 26 million units. Little or no increase is anticipated in 2010 in keeping with commercial economic forecasts and the impact of the Chinese tire tariff.
  • Replacement Medium/Wide-Base/Heavy On-Highway Commercial Truck Tires: The market is anticipated to decrease by approximately 2.3 million units in 2009 to nearly 12.6 million units. Given the uneven economic rebound forecast for 2010, this market is expected to increase by less than 1 million units to nearly 13 million units.

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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.

CALIFORNIA TIRE MEASURE IS A LAWSUIT MAGNET

For more information contact:
Dan Zielinski
(202) 682-4846
dzielinski@rma.org

RMA Says Bill is Inconsistent, Contradictory, Fear-Mongering

WASHINGTON, D.C.May 28, 2009 - The Rubber Manufacturers Association today criticized a California Assembly bill as “inconsistent”, “contradictory,” and “fear-mongering” that would only serve to increase lawsuit opportunities for the bill’s primary supporters – trial lawyers.

The Assembly passed the measure today by a vote of 41-28.

AB 496 would selectively require consumer notification about a tire’s chronological age on some sellers of replacement tires, primarily tire dealers. Supporters of the measure claim that tires reaching a certain age are a potential safety hazard and say the notification is necessary to prevent older tires from being placed into service.

However, supporters’ alleged concern with motorist safety is contradicted by provisions in the bill that would exempt millions of tires from the bill’s age notification.

“Proponents of this bill use fear-mongering to allege that tires reaching a certain chronological age are dangerous,” said Dan Zielinski, RMA senior vice president, public affairs. “But the bill is inconsistent in its application. Any consumer who buys tires or a vehicle in a private transaction, or who buys a new or used vehicle from a dealer or who buys replacement tires from an auto dealer would not receive a notification under this proposal. These exemptions make the measure contradictory on its face and are implicit acknowledgement that chronological tire age alone is not a hazard.”

RMA also says that the measure’s notification provisions are confusing and likely to result in second-guessing by trial lawyers.

“Providing a simple, understandable notification to consumers about a tire’s date of manufacture is reasonable,” Zielinski said. “But the bill provides several options that would likely lead to trial lawyers’ accusations that a dealer didn’t provide the most appropriate notification. This would force nearly all notifications to be given prior to the point of sale which will result in needless service delays.”

In an earlier letter of opposition to AB 496 author, Assembly Member Mike Davis, RMA noted that a prior-to-sale notification would be impractical and burdensome.

Although several auto and tire manufacturers have issued recommendations for tire replacement after a number of years, none are derived from technical data that suggests a tire would not perform after such time.

Allegations that there is a correlation between tire performance and chronological tire age are unfounded and unsupported by data. No auto industry, tire industry or National Highway Traffic Safety Administration (NHTSA) data has determined that a tire cannot perform when it reaches a particular chronological age.

Information provided by RMA to NHTSA shows that chronological tire age is not a factor in tire performance. An RMA study of 14,000 scrap tires did not reveal any indication that tires are removed from service once they reach a certain chronological age. A second comprehensive study of all claims made by consumers to tire manufacturers over a six-year period showed that the rate of claims as a function of the chronological age of tires actually decreases after six years.

“AB 496 would only benefit trial lawyers by creating a new roadmap to sue California tire dealers,” Zielinski said. “The measure makes inaccurate statements about tire performance and imposes new burdens on tire retailers in a particularly unfortunate economic climate.”

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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.

RMA URGES TURFGRASS GROUP TO CORRECT INACCURATE CRUMB RUBBER INFORMATION

For more information contact:
Dan Zielinski
(202) 682-4846
dzielinski@rma.org

2009 Turfgrass Letter

WASHINGTON, D.C.April 21, 2009 - The Rubber Manufacturers Association has sent a letter to Turfgrass Producers International urging the group to correct a number of inaccuracies it posted on its web site concerning the use of crumb rubber in artificial turf applications.

“Your web site also raises many health concerns about scrap tire generated ground rubber. You may not be aware of numerous scientific reports and studies that have examined such concerns and have concluded that scrap tire generated ground rubber poses no threat to human health.,” explained Michael Blumenthal, vice president.

RMA has offered to provide the group with information so that consumers are not misled to the belief that scrap tire derived products pose any consumer health risk. RMA will monitor the group’s site.

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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.