No Growth Predicted for 2007 Tire Shipments

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Dan Zielinski
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WASHINGTON, D.C.August 16, 2007 – Tire shipments are expected to decrease slightly in 2007 as modest gains in the replacement markets are offset by further weakening in the original equipment (OE) tire markets, according to the Rubber Manufacturers Association

Revisions to RMA’s 2007 tire shipments forecast reflect changes in U.S. economic growth predictions for both the consumer and commercial sectors. The group projects that replacement tire markets in 2007 will show an increase of nearly 2 percent with OE markets declining approximately 8 percent.

Overall, the combined OE and replacement shipments for 2007 auto and truck categories are anticipated to decrease by fewer then one million units to approximately 306 million total shipments.

RMA’s Tire Market Analysis Committee forecast for key categories and their respective segments for 2007 include:

• Original Equipment Passenger Tires: This market is projected to decrease by approximately 4.5 percent in 2007 to 46.0 million units from 48.2 million units in 2006 as a result of further decreases in domestic light vehicle sales and production. Little or no change in the shipments is projected for the near future as imported vehicles increase their share in the light vehicle markets.

• Original Equipment Light Truck (LT) Tires: Less then 4.5 million OE units are forecasted to be shipped in 2007, representing a decrease of approximately 12 percent or 600,000 units over 2006 levels as a result of more light truck type vehicles being fitted with P-metric passenger tires rather than LT tires. Future growth in this category is expected to be slight as growth will be more dependent on commercial light truck applications.

• Original Equipment Medium/Wide-Base/Heavy On-Highway Commercial Truck Tires: Sales of commercial truck vehicles have experienced a sharper drop then anticipated for 2007 as changes in EPA regulations pulled forward 2007 truck sales into 2006. As a result, the forecast for this category has been revised further downward to a projected 29 percent decrease in OE shipments for 2007, or nearly 4.8 million units total, or approximately 2 million units less then the 6.8 million units shipped in 2006.

• Replacement Passenger Tire: Passenger replacement market will experience an increase of nearly 2 percent to approximately 200 million units in 2007 representing a gain of 4 million units over 2006’s shipments. Growth in this category is predominately a result of increases in the P-metric tire market (for SUV and smaller Pick-up trucks), which is projected to grow more than 8 percent, and the High and Ultra High Performance tire markets, which are projected to increase more than 6 percent and 11 percent, respectively. Growth in this segment is expected to continue as driving habits have not materially changed as a result of higher fuel costs, and tire purchases deferred in 2006 are beginning to appear in 2007.

• Replacement Light Truck Tire: This market segment is forecasted to increase by approximately 500,000 units to approximately 34 million units in 2007 primarily a result of higher demand from commercial vehicles using LT type tires.

• Replacement Medium/Wide-Base/Heavy On-Highway Commercial Truck Tires: The forecast for this market has been revised to 16.4 million units in 2007, a decrease of 500,000 units from 2006’s shipments, reflecting the slightly weaker economic forecast for the remainder of 2007.

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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.