RMA: 'Tire shipments will grow through 2008'
The Rubber Manufacturers Association (RMA)forecasts domestic tire shipments will grow more than 2% this year compared to 2002.
The RMA projects a continued annualized growth rate of more than 2% through 2008 as the nation's Gross Domestic Product and Industrial Production Index (IPI) build significant momentum.
Tire shipments for 2002 increased by 2.6% "due to the high rate of light vehicle production, a rebound in the commercial trucking sector and a strengthening U.S. economy," said RMA officials.
Overall, the combined original equipment (OE) and replacement shipments for 2002 auto and truck categories increased by 7.8 million units to nearly 308.4 million units compared to 2001's 300.5 million total shipments. Similarly, total shipments will grow by approximately 8 million units in 2003 -- a 2.2% growth rate -- to over 315 million units and eventually exceed 350 million units in 2008.
Through 2004 and beyond, tire shipments should shake out as follows, according to the RMA's Tire Market Analysis Committee:
Original equipment passenger tires: As a result of the continuing new vehicle buyer incentive programs, OE tire shipments to domestic light vehicle manufacturers increased by 5.1% in 2002 to 57.3 million units.
A slight decline of 1.6% is forecasted for 2003, as new vehicle buyer incentive programs lose their allure and domestic light vehicle production declines by approximately 250,000 units.
No improvement is anticipated through 2008 because current vehicle buyer incentive programs will draw from future vehicle sales. In addition, some vehicle production will be shifted outside the U.S.
OE light truck tires: The total light truck OE market for 2002 was 8.3 million units. It is forecasted to grow at an annualized rate of more than 3%, and is expected to exceed 10 million units in 2008.
An increase of more than 700,000 units is expected for 2003 as the sport-utility vehicle market continues to grow.
OE medium/wide-base truck tires: Sales of commercial truck vehicles have picked up as a result of stricter emission standards that began in October. There was a 12.4% increase -- approximately 400,000 units -- in OE shipments for 2002 as they nearly reached the 4 million mark.
This will continue in 2003 and 2004; the truck trailer market is expected to rebound, and a greater number of trucks will be sold to meet economic and industrial growth, resulting in increases of 7.3% and 15.6%, respectively.
Replacement passenger tires: The "pull forward" effect of P-metric tire shipments from 2002 and 2003 into 2000 and 2001 (from the Firestone recall and Ford replacement programs) had a small, adverse impact on overall 2002 replacement passenger tire shipments.
Total replacement shipments showed virtually no change, remaining at 190.5 million units. The nearly 14% decrease in 2002 P-metric tire shipments was largely offset by increases in other tire categories such as the ultra-high performance and high performance tires, which experienced increases of 13.6% and 17.3%, respectively.
In 2003 and 2004, the replacement passenger tire market will grow at an annualized rate of nearly 3%. Shipments in 2004 will be close to 202 million units; a rebound in the economy combined with replacement of P-metric tires that were part of the recall and replacement programs, will drive the expected growth.
Replacement light truck tires: Shipments in 2002 totaled 33.6 million units. This market segment is forecasted to grow by 1.5 million units in 2003 and average an annualized growth rate of more than 3% through 2008.
Replacement medium/wide-base truck tires: Shipments increased a strong 8.2%, to 14.7 million units, in 2002. They are forecasted to grow to some 15 million units in 2003, mainly as a result of the expected strong rebound in industrial production.
The RMA's Tire Market Analysis Committee is comprised of tire market analyst professionals representing the major tire manufacturers in the United States.