Tire shipments in 2011 are projected to increase by 3% — nearly 8 million units — to 293 million units, according to the Rubber Manufacturers Association (RMA). Tire shipments increased by 9.7% to 285 million units in 2010, marking the onset of the economic recovery.
OE tire shipments for both the light vehicle and commercial truck markets will make up the bulk of the increase in 2011. RMA says pent-up demand for both for light vehicles and commercial trucks continues to drive domestic new vehicle sales and production.
According to RMA, growth in replacement tire shipments will be modest in 2011 as higher fuel costs and reduction in non-essential driving will restrain the overall growth rate to less than 2%, or approximately 248 million total units. Nonetheless, the forecast is for continued overall positive economic conditions for both the consumer and commercial sectors as both the gross domestic product and industrial production indicators are forecast for above-trend growth.
RMA’s Tire Market Analysis Committee forecast for key categories and their respective segments for 2010 and 2011 include:
● OE passenger tires: Passenger OE tire shipments are anticipated to increase by approximately 4 million units, or nearly 12%, to 36.9 million units in 2011 as domestic vehicle production continues to increase in response to higher vehicle sales owing to incentive programs, greater credit availability and low interest rates. Total light vehicle sales for 2011 are projected to be approximately 13 million vehicles, up from 11.6 million vehicles sold in 2010. OE tire shipments for 2010 came in at 33.1 million units, up nearly 35% as domestic auto production ramped up from near historic lows in 2009.
● OE light truck tires: This category experienced a 29.6% increase in 2010 to 3.6 million units due to improved economic conditions respective to the commercial sectors, which utilize light truck vehicles. Little or no growth is anticipated for 2011 as no further vehicle production increases are anticipated for vehicles that utilize LT tire fitments. As a result, total shipments are forecast to remain at approximately 3.6 million units.
● OE medium/wide-base/heavy on-highway commercial truck tires: Medium OE tire shipments saw a 31.8% jump in shipments to 3.2 million units reflecting pent-up demand for commercial trucks and trailers concurrent with a significant increase in the Industrial Production Index for 2010. This sector is forecast to continue to grow by approximately 30% in 2011, or another nearly 1 million units as the commercial sector continues to strengthen and reflect economic growth forecasts.
● Replacement passenger tire: Shipments for this category increased in 2010 by 11.1 million units, or 5.8%, to 200.6 million units as the economy rebounded and miles travelled increased. However, growth will be tempered in 2011 as higher energy costs, a decrease in non-essential driving, and continued economic uncertainties weigh on the consumer. As a result, a less than 2% increase, or nearly 3 million units, is forecast for 2011. Non-RMA imports increased nearly 9% in 2010 with another approximate 4% increase anticipated for 2011.
● Replacement light truck tire: The onset of the economic recovery enabled LT tire shipments to increase by 1.2 million units to 28.7 million units in 2010, a gain of 4.4%. However, no further growth is anticipated in 2011 in that this segment represents the small commercial vehicle market – mainly “class 3” trucks – as well as a core group of consumers, where the number of vehicles in use and miles driven will remain relatively constant.
● Replacement medium/wide-base/heavy on-highway commercial truck tires: This market increased by approximately 2.9 million units in 2010 to 15.8 million units, as the commercial sector of the economy grew by nearly 6% after the nearly 10% slump in 2009. For 2011, further growth is expected to moderate such that tire shipments will increase by approximately 5%, or 800,000 units.
