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Surprise! RMA predicts a slight GROWTH in overall tire shipments

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Tire shipments are expected to increase slightly in 2007 thanks to growth in the replacement markets, according to the Rubber Manufacturers Association (RMA).

Revisions to the RMA's tire shipments forecast from Aug. 16, when no growth was predicted, are "a reflection of revised U.S. economic growth forecasts for both the consumer and commercial sectors."

The RMA projects the replacement tire markets in 2007 will show a combined increase of approximately 2.7%, which will offset a decline of nearly 8.2% in the original equipment tire markets.

Overall, the combined OE and replacement shipments for passenger, light truck and truck tires in 2007 are expected to increase by 1.8 million units -- or 0.6% -- to approximately 308 million total shipments.

The RMA's Tire Market Analysis Committee's forecast for key categories and their respective segments for 2007 vs. 2006 include the following:

OE passenger tires: a decrease of 2.2 million units (4.5%) to 46 million units. "This is a result of weaker than anticipated new vehicle sales, which has caused domestic fourth-quarter production cuts," says the RMA.

OE light truck (LT) tires: a decrease of 600,000 units (12%) to 4.4 million units. "This decrease is attributed to more consumer light truck type vehicles being fitted with P-metric passenger tires rather than LT tires, and further cuts in domestic vehicle production."

OE medium/wide-base/heavy truck tires: a decrease of 2.1 million units (31%) to 4.7 million units. "Sales of commercial truck vehicles have experienced a sharp drop in 2007 as changes in EPA regulations pulled forward 2007 truck sales into 2006."

Replacement passenger tires: an increase of 6.5 million units (3.3%) to approximately 203 million units. RMA cites "pent-up demand" from 2006 and the increase in imported tires as reasons for the increase.

Replacement light truck tires: an increase of 600,000 units (1.7%) to approximately 34.2 million units. The increase is "primarily a result of higher demand from commercial vehicles using LT-type tires."

Replacement medium/wide-base/heavy truck tires: a decrease of 500,000 units (2.7%) to 16.4 million units. The decrease reflects "a weaker economic forecast for the fourth quarter of 2007."

The RMA's Tire Market Analysis Committee is comprised of tire market analyst professionals representing the major domestic tire manufacturers, which account for more than 90% of all U.S. tire shipments. The committee's analysis of current and future industry activities, and subsequent forecasts, include a review of:

* RMA tire industry and economic data;

* government trade figures; and

* vehicle sales and production.

The committee's views are not the sole opinion of any one committee member, member company, or RMA representative, adds RMA.

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