Bob Ulrich

Editor

Bob Ulrich was named Modern Tire Dealer editor in August 2000. He joined the magazine in 1985 as assistant editor, and has been responsible for gathering statistical information for MTD's "Facts Issue" since 1993. He has won numerous awards for editorial and feature writing, including five gold medals from the International Automotive Media Association. Bob earned a B.A. in English literature from Ohio Northern University and has a law degree from the University of Akron.

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How close are the tire shipment numbers? We grade the RMA

By: Bob Ulrich

Back on Dec. 1, 2010, the Rubber Manufacturers Association (RMA) released its 2010 domestic tire shipments forecast. It also made some early predictions as to how passenger, light truck and truck tire shipments would fare in 2011.

Two-and-a-half months later, the RMA has released its preliminary "2011 Factbook," The numbers, for all intents and purposes, are final.

Don't be fooled by the word "preliminary," which applies more to the information not included in the "Factbook." I can't recall the shipment numbers ever changing from the preliminary "Factbook" to the final edition, which won't be available for months. The final version is just larger, with some information yet to be distilled.

So, how close did the RMA's Tire Market Analysis Committee come to its Dec. 1 numbers? In the previous "2010 Factbook," the numbers were off significantly.

Before I go on, I should note that Modern Tire Dealer's own numbers, published in our "2011 Facts Issue" in January, often differ from the RMA's numbers. They differed this year, too.

I believe that predictions or early estimates sent out as news should be subject to comparison or, in this case, grading. Because all the numbers come from the RMA, the comparison is apples to apples.

Here are the results, in millions of units, with comments from the perspective of the Dec. 1 numbers.

Tires                              Dec. 1     Final

Passenger                   234.6       234.4

   Replacement            199.0       201.3

   Original equipment    35.6          33.1

The overall numbers are extremely close. The replacement number was 2.3 million units too low, or 1.1% off. The OE number was high, 7% off. There must have been a lot of OE tires dumped into the replacement market in the final month or two, of which I'm sure the tire manufacturers are aware. But that seems to happen every year, doesn't it? Grade: B

Tires                              Dec. 1     Final

Light truck tires            31.7         32.7

   Replacement            28.0          29.1

   Original equipment    3.7            3.6

The overall shipment numbers are 3% off. The replacement number is 3.9% too low, while the OE number is nearly spot on. I would think the smaller the market, the closer the predictions to the final numbers. Grade: B-

Tires                              Dec. 1     Final

Truck tires                     18.5        19.0

   Replacement             15.5        15.8

   Original equipment     3.0           3.2

The overall numbers are off by 500,000 units, or 2.7%. The replacement number is low by just under 2%, while the OE number is low by 6%. Grade: B-

I'm not sure what the purpose of releasing the guesstimates for 2010 in December is. And there are so many variables that affect tire shipment numbers over the course of the year that predicting the upcoming year's shipments is often little more than a crapshoot. But I give them props for trying.

Looking at the numbers in total, the RMA predicted total shipments of 284 million units. The final tally was 286.1 million, or less than 1% off. Grade: A

Because the comparative size and profit in the replacement market dwarf those in the OE segment, getting the replacement numbers right is probably more important to the RMA members than the OE number.

And taking into account the fudge factor -- the committee often used words like "approximately" or "nearly" -- my overall grade on the predictions on Dec. 1 is: a solid B.

What do you think?

Related Topics: B.O.B., OE tires, Replacement tires, RMA

comments

1. Steve | March 17, 2011 at 10:38AM
   I thought I'd point out that the RMA forecasts at the segment level for replacement and rounds to the nearest 100,000 units. When you roll up those forecasts to get the total you're also including all the rounding errors in each segment.
   
   Also, at their November meeting the RMA members are mostly concerned with the next year for planning purposes for the manufacturers. The last two months of the current year aren't really important at all and are usually just projections off the Jan-Oct shipments. So your grades are basically on how well the industry tracked against the previous 10 months of shipments rather than the forecasting abilities of the RMA members.