RMA adds 4% to tire forecast

LSRUNQI

RMA adds 4% to tire forecast

  |& o7 `& d; ~9 y: vWednesday, August 3, 2011

Washington, DC - The Rubber Manufacturers Association revised its 2011 tire shipment forecast upward approximately 4%, nearly 11 million units, to 296 million units. Original equipment tire shipments for both the light vehicle and commercial truck markets will add approximately five million of the combined total 11 million OE and replacement units increase in 2011 as pent up demand for both for light vehicles and especially commercial trucks continues to drive domestic new vehicle sales and production. Growth in replacement tire shipments will remain modest in 2011 as persistent high fuel costs and little or no change in the number of miles driven will temper the overall growth rate to a little more than 2%, or approximately 251 million total units. However, the forecast still remains guardedly optimistic. RMA’s Tire Market Analysis Committee 2011 revised its forecast for original equipment passenger tire shipments slightly lower to approximately 36 million units, an 8.5% increase. This is a result of decreased vehicle production due to the Japanese earthquake/tsunami and its impact on component suppliers. Total light vehicle sales for 2011 are projected to be approximately 13 million vehicles, up from 11.6 million vehicles sold in 2010. Original equipment light truck tires are forecast to experience an nearly 18% increase in 2011 to approximately 4.3 million units due to the shift to larger vehicles as a consequence of pent up demand, buyer incentive programs along with improved economic conditions in commercial sectors that utilize light truck vehicles. Growth in replacement passenger tires is anticipated to be just below 1% as continued high energy costs, decreases in non-essential driving, and continued economic uncertainties weigh on the consumer. The nearly 1% growth is forecast to result in less than a 2 million unit increase for 2011 with total passenger replacement units reaching approximately 202 million units. The replacement light truck tire category, represented by small commercial vehicle market – mainly “class 3” trucks, is expected to increase by more than 2 million units to approximately 31 million units in 2011. This equates to a gain of more than 7% and is primarily attributed to the economic recovery in the commercial sector.