WASHINGTON — According to the Rubber Manufacturers Association (RMA), tire shipments will grow 3.2 percent overall in 2004, due to a rebound in the commercial trucking sector and a strengthening U.S. economy. Tire shipments for 2003 increased by 0.6 percent, compared to 2002 levels, said the RMA, as a result of a strong replacement tire market demand being offset by a decline in light vehicle OE tire markets.
The association projects continued annualized growth of approximately 2 percent for total tire shipments through 2009 as the nation’s Gross Domestic Product (GDP) and Industrial Production Index (IPI) gain momentum.
Overall, combined shipments (OE and replacement) for 2003 light vehicle and commercial truck categories increased by 1.9 million units to nearly 310 million, the RMA reported. A decrease of nearly 3 million units in the OE market was offset by an increase of roughly 5 million units in the replacement markets. By 2009, the combined market figure is forecast to exceed 350 million units.
RMA also released its Tire Market Analysis Committee forecast for key categories and segments covering 2004 through 2009:
OE Passenger Tires: An approximate 5 percent decline to 54.4 million units was realized for 2003 due to a decline in domestic light vehicle production of nearly 200,000 units. Little or no growth is anticipated for 2004 through 2009, as increases in domestic light vehicle sales are offset by increases in Mexican and Canadian vehicle production along with increases in marketshare by offshore auto manufacturers.
OE Light Truck (LT) Tires: Shipments decreased by more than 4 percent, to 7.9 million units, for 2003 but will rebound by nearly 6 percent, to approximately 8.4 million units in 2004. Light truck and sport utility vehicle (SUV) production for 2004 will increase, and more of them will be fitted with the LT tire. This market will continue to experience a strong 2.7 percent annualized growth rate through 2009, at which time shipments will approach 10 million units. Note that this market also incorporates service trailer tires, which were reclassified in 2002, from passenger tires to LT OE tires, and comprise a percentage of the overall LT OE tire market.
OE Medium/Wide-Base Truck Tire: Shipments in 2003 grew 7 percent, reaching the 4.2-million-unit level as the industrial sector rebounded. Sales of commercial truck vehicles will increase dramatically, which is in line with the 5 percent-average-increase forecast for the Industrial Production Index (IPI) over the next several years. The net effect will be approximately 22 percent growth, or a 900,000-unit increase in OE shipments for 2004, to 5.1 million units. Growth is expected to continue from 2004 through 2006 and top out at nearly 6.3 million units when stricter Environmental Protection Agency (EPA) emission standards for trucks for 2007 take effect and curtail shipments through 2009.
Replacement Passenger Tire: The passenger replacement markets saw most of their increase in the latter half of 2003, resulting in an annual 1.6 percent increase over 2002 – 193.6 million units. Further increases are expected for 2004; total units will reach the 200 million mark, at a gain of 2.6 percent. As a result, 2004 is likely to set a record by exceeding the 198.9 million units recorded in 2000. By 2009, it is forecast that this market will break the 225-million tire barrier, for an annualized five-year growth rate of more than 2 percent.
Replacement Light Truck (LT) Tire: This market segment increased by more than 800,000 units over 2002’s figures – to 34.5 million units. An additional 1.8 million units is forecast in 2004, for a total market of 36.3 million units. This trend is due to strong economic predictions and more SUV and light truck vehicle owners opting for LT replacement tires in place of P-metric passenger tires. Over the next 5 years, the market will expand to 42 million units for a five-year annualized growth rate just short of 3 percent.
Replacement Medium/Wide-Base Truck Tire: This market grew by 5.5 percent in 2003, to approximately 15.5 million units, mainly as a result of a rebound in industrial production during the second half of the year. The increase will continue through 2006, when shipments are estimated to top out at 16.5 million units and remain at that level through 2009.
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