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RMA: 'Shipments will grow more than 2%'

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Tire shipments for 2005 are expected to increase by more than 2% compared to 2004 due to continued economic growth in the consumer and commercial sectors, say Rubber Manufacturers Association (RMA) officials.

"Absent a change in driving behavior due to increased energy costs, steady growth in tire shipments is expected to continue over the next 18 months as the economy continues its moderate growth pattern.

"Overall, the combined original equipment and replacement shipments for 2005 auto and truck categories are anticipated to increase by 7 million units, or 2.2 percent to over 325 million units."

The RMA projects continued growth of more than 2% in 2006 for total tire shipments reflecting increases in the nation's Gross Domestic Product and Industrial Production Index.

The RMA’s Tire Market Analysis Committee forecast for key categories and their respective segments for 2005 and 2006 include:

* OE passenger tires: "A decrease of nearly 0.4% to approximately 53 million units is projected for 2005, reflecting a decrease in production of light trucks and SUV’s with P-metric tires. A nearly 1% increase is forecast in 2006, owing to a modest increase in light vehicle sales and subsequent increase in domestic light truck production."

* OE light truck tires: "A decrease of 2.5% is expected for 2005 to approximately 7.7 million units as consumers are introduced to smaller-sized cross-over utility vehicles. However, a nearly 1% increase is anticipated for 2006 reflecting growth in the commercial sector."

* OE medium/wide-base truck tires: Sales of commercial truck vehicles will experience solid growth through 2006 due to replacement demand and in response to future changes in EPA regulations, say RMA officials. "The net effect will be a greater than 13% growth in OE shipments for 2005 to 6.5 million units. Growth is expected to continue in 2006 at slightly less than 5%."

* Replacement passenger tires: "The passenger replacement market will increase by 2.8% to more than 204 million units for 2005. The increase in this category is due predominantly to the P-metric, high and ultra-high performance tire markets.

"The P-metric category is expected to grow by 13.6% to 39.5 million units owing to increases in sport and cross-over utility type vehicle registrations.

"The high and ultra-high performance markets are anticipated to grow by more than 5% and 13%, respectively, compared to 2004. Similar growth in these categories is anticipated for 2006. Despite higher fuel prices, steady growth in this segment is largely attributed to continued growth in the number of vehicles on the road and increasing vehicle miles traveled."

* Replacement light truck tires: "This market segment is projected to increase by 1.4% to approximately 37 million units in 2005, with a further 2.4% growth expected for 2006, again reflecting the greater number of vehicles on the road."

* Replacement medium/wide-base truck tire: "This market is forecast to grow to 16.9 million units in 2005, mainly as a result of the continued growth in industrial production and freight movement. Further growth of a little more than 2% will be realized for 2006."

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