Shipments will decline 4.5% in 2006, expect small rebound next year
Tire shipments are expected to decline 4.5% for the full year of 2006, reflecting an overall slowdown in the United States' economy, say Rubber Manufacturers Association (RMA) officials. However, a "modest" rebound of 1.4% is expected next year.
The RMA has released its Tire Market Analysis Committee forecast for key categories and their respective segments from 2006 through 2011:
* Original equipment passenger tires: "This market is projected to decrease by more than 8%, or 4.6 million units, to approximately 48 million units in 2006 as a result of a decrease in domestic light vehicle sales and subsequent decreases in domestic light vehicle production," say RMA officials. "No growth is expected in 2007 with total shipments remaining at around the 48 million unit level."
* Replacement passenger tires: "The passenger replacement market will decrease by approximately 3.2% in 2006 to nearly 196 million units, or 6.5 million units.
"Nonetheless, the P-metric (for SUV type vehicles) and ultra-high performance tire markets are projected to increase by approximately 4% and 12%, respectively, compared to 2005.
"A modest rebound of over 2%, or approximately 4 million units, is forecasted in 2007 as the effects of higher energy prices wane. As a result, total passenger replacement shipments are anticipated to reach 200 million units again."
* OE light truck tires: "Approximately 5 million units are projected to be shipped in 2006 to be followed by a 4%, or 200,000 unit, increase in 2007," say officials. "The increase is owed to the demand for small commercial trucks over the next year." Service trailer tires are no longer included in this category.
* Replacement light truck tires: "This market segment is projected to decrease by approximately 7.2%, or nearly 2.6 million units, to 33.4 million units in 2006 due to the increasing popularity and numbers of cross-over vehicles and smaller SUVs that use P-metric passenger tires rather than light truck tires."
* OE medium/wide-base/heavy on-highway commercial truck tires: "Approximately 6.8 million OE units are estimated to be shipped in 2006 for an increase of nearly 9%, or 560,000 units. This increase can be attributed to the significant growth of sales of commercial truck vehicles over the calendar year as a result of continued vehicle replacement demand and response to changes in 2007 Environmental Protection Agency emission regulations.
"A sharp decline of approximately 20%, or approximately 1.5 million units, is anticipated in 2007... given that some pulled-ahead truck sales that would have been realized in 2007 are being shifted to 2006."
* Replacement medium/wide-base/heavy on-highway commercial truck tires: "This market is projected to decrease by approximately 2 %, or 300,000 units, to 17.2 million units in 2006. However, shipments will increase by the nearly the same number of units in 2007 to reach 17.5 million units."