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RMA revises 2011 estimates by 9 million units

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On Dec. 2, the Rubber Manufacturers Association (RMA) lowered its 2011 tire shipment forecast to 287 million total units. The new total still represents a nearly 1% increase -- approximately two million units -- this year compared to 2010.

Four months ago, the RMA estimated tire shipments in 2011 would total approximately 296 million units.

Consumer replacement shipments also will be less than originally predicted in August. At that time, replacement passenger tire growth was expected to be less than 1%, while replacement light truck tire shipments were projected to be up more than 7%.

With one month left in the year, the RMA forecasts replacement passenger and light truck tire shipments in 2011 to be down approximately 2% and up approximately 2%, respectively.

The RMA  says the changes are a result of the downward revisions in year-end economic growth in the United States economy.

"For 2012, the forecast remains guardedly optimistic as U.S. economic growth is anticipated to remain slow," says the RMA’s Tire Market Analysis Committee. "As such, overall tire shipments are forecasted to increase by more than 2%, reaching a total of over 290 million total units.

"Persistently high fuel costs, a decrease in miles driven by consumers plus moderating growth in the commercial replacement tire sector have led to a restrained outlook."

Here are the revised numbers per segment in relation to those in 2010 (with the August 2, 2011, estimates -- not the 2010 numbers -- in parentheses).

Original equipment passenger tires:  OE tire shipments were revised slightly lower to approximately 35 million units (from 36 million), a 5.4% increase over 2010, "as a result of decreased vehicle production related to supply chain disruptions due to the natural disasters in both Japan and Thailand."

The forecast for 2012 is for an approximate 13% increase to nearly 40 million OE units. "Available credit and attractive vehicle prices are expected to drive vehicle sales."

Original equipment light truck (LT) tires: This category is forecasted to experience a nearly 15% increase in 2011 to approximately 4.2 million units (4.3 million) due to the shift to larger vehicles as a result of more fuel-efficient pickups and improved economic conditions in commercial sectors that utilize light trucks.

However, a 7% decrease to 3.9 million units, a drop of approximately 300,000 units, is forecasted for 2012. "This is a consequence of a trend towards light trucks built on car-based platforms instead of truck-based platforms, owing to increased vehicle fuel mileage standards and consumer demand."

Original equipment medium/wide-base/heavy on-highway commercial truck tires: The forecast for commercial OE tire shipments was revised upward for 2011; total shipments will reach nearly five million units (4.7 million). "This underscores the pent-up demand for commercial trucks and trailers concurrent with a predicted nearly 4% increase in the Industrial Production Index."

For 2012, the forecast is for an additional nearly 10% increase, as pent-up demand offsets a slowing economy.

Replacement passenger tires: The forecast for this category was revised to show a decrease of approximately 2% for 2011, as vehicle miles driven have declined, energy costs remain high, and continued economic uncertainty weighs on the consumer. The decrease represents a drop of approximately four million units for 2011, with total passenger replacement units reaching approximately 196 million units (from a 202 million estimate on Aug. 2).

For 2012, less than 1% growth is forecasted -- representing an approximate one million unit increase -- as economic growth continues to remain sluggish and vehicle miles driven ticks up slightly.

Replacement light truck tires: This category, represented mainly by “Class 3” trucks, was revised downward to an approximate 2% increase in 2011 -- a growth of approximately 700,000 units to nearly 29 million total units (31 million). "The downward revision was primarily attributed to the slower than expected recovery in the light truck category as well as change in light truck platforms to car platforms, which began in 2008."

For 2012, no further increase is anticipated as the economy is expected to remain weak.

Replacement medium/wide-base/heavy on-highway commercial truck tires: The forecast for this market will remains strong for 2011, as commercial trucking has grown concurrent with the increase in the Industrial Production Index. As such, the market is anticipated to increase by approximately 1.5 million units in 2011 to nearly 17 million units (nearly 18 million).

For 2012, an additional 800,000 units are anticipated as the Industrial Production Index is forecasted to continue to grow by more than 2%.

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