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Published on September 3, 2007

RMA expects drop in 2007 tire shipments

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Date Published September 3, 2007

The Rubber Manufacturers Association further downgraded its forecast for tire shipments this year-calling for a decrease in overall shipments instead of minor increases-reflecting changes in U.S. economic growth in the consumer and commercial sectors.

The RMA said shipments will fall by about 1 million units to about 306 million total shipments for the full year. Replacement tire markets should increase about 2 percent while original equipment markets should fall about 8 percent.

In March, the RMA had expected a slight improvement of about 0.3 percent in overall shipments, including a 1.4-percent gain for replacement tires and a 3.8-percent decline in OE. In January, the RMA had called for an increase in overall shipments of about 4 million units.

In its latest forecast, the RMA detailed the following for certain segments:

* Original equipment passenger tires: a decrease of about 4.5 percent to 46 million units from 48.2 million units in 2006 on decreases in domestic light vehicle sales and production;

* Original equipment light truck tires: a decrease of about 12 percent to less than 4.5 million units as more light truck vehicles are outfitted with P-metric passenger tires;

* Original equipment medium/wide-base/heavy commercial truck tires: a 29-percent drop to about 4.8 million units as the market experiences a sharper drop than expected because of changes in Environmental Protection Agency regulations;

* Replacement passenger tires: an increase of about 2 percent to about 200 million units, or 4 million units ahead of 2006, on gains in P-metric markets for light trucks and high- and ultra-high-performance tires;

* Replacement light truck tires: a rise of about 500,000 units to 34 million as more commercial vehicles use light truck tires; and

* Replacement medium/wide-base/ heavy commercial tires: a decline of 500,000 units to 16.4 million on a weaker economic forecast for the rest of the year.