News from Notch Consulting, Inc.

December 6, 2011

RMA lowers estimate for US tire shipments

Filed under: Carbon Black, General, insoluble sulfur, Silica, Tire Cord, Tires — Notch @ 2:53 pm

2011 TIRE SHIPMENTS TO GROW NEARLY ONE PERCENT

Two percent increase anticipated for 2012
WASHINGTON, D.C., December 2, 2011 – The Rubber Manufacturers Association lowered its 2011tire shipment forecast to 287 million total units, which represents a nearly one percent increase or approximately two million units more than 2010. This is a result of downward revisions in year-end economic growth in the U.S. economy.

For 2012, the forecast remains guardedly optimistic as U.S. economic growth is anticipated to remain slow. As such, overall tire shipments are forecasted to increase by more than two percent reaching a total of over 290 million total units. Persistently high fuel costs, a decrease in miles driven by consumers plus moderating growth in the commercial replacement tire sector have led to a restrained outlook.

RMA’s Tire Market Analysis Committee 2011 forecast for key categories include:

Original Equipment (OE) Passenger Tires: OE tire shipments were revised slightly lower to approximately 35 million units, a 5.4 percent increase over 2010, as a result of decreased vehicle production related to supply chain disruptions due to the natural disasters in both Japan and Thailand. The forecast for 2012 is for an approximate 13 percent increase, to nearly 40 million OE units, as available credit and attractive vehicle prices are expected to drive vehicle sales.

Original Equipment Light Truck (LT) Tires: This category is forecasted to experience a nearly 15 percent increase in 2011 to approximately 4.2 million units due to the shift to larger vehicles as a result of more fuel efficient pickups and improved economic conditions in commercial sectors that utilize light trucks. However, a 7 percent decrease, or approximately 300,000 units for a total of 3.9 million units, is forecasted for 2012. This is a consequence of a trend towards light trucks built on car-based platforms instead of truck-based platforms owing to increased vehicle fuel mileage standards and consumer demand.

Original Equipment Medium/Wide-Base/Heavy On-Highway Commercial Truck Tires: The forecast for commercial OE tire shipments was revised upward for 2011 to approximately 54 percent, reaching nearly five million total units. This underscores the pent up demand for commercial trucks and trailers concurrent with a predicted nearly four percent increase in the Industrial Production Index. For 2012, the forecast is for an additional nearly 10 percent increase as pent up demand offsets a slowing economy.

Replacement Passenger Tire: The forecast for this category was revised to show a decrease of approximately two percent for 2011 as vehicle miles driven have declined, energy costs remain high, and continued economic uncertainty weighs on the consumer. The decrease represents a drop of approximately four million units for 2011 with total passenger replacement units reaching approximately 196 million units. For 2012, less than one percent growth is forecasted – representing an approximate one million unit increase – as economic growth continues to remain sluggish and vehicle miles driven ticks up slightly.

Replacement Light Truck Tire: This category, represented by small commercial vehicle market – mainly “class 3” trucks, was revised downward to an approximate two percent increase in 2011 – a growth of approximately 700,000 units or nearly 29 million total units. The downward revision was primarily attributed to the slower than expected recovery in the light truck category as well as change in light truck platforms to car platforms, which began in 2008. For 2012, no further increase is anticipated as the economy is expected to remain weak.

Replacement Medium/Wide-Base/Heavy On-Highway Commercial Truck Tires: The forecast for this market will remain strong for 2011 as commercial trucking has grown concurrent with the increase in the Industrial Production Index. As such, the market is anticipated to increase by approximately 1.5 million units in 2011 to nearly 17 million units. For 2012, an additional 800,000 units are anticipated as the IPI is forecasted to continue to grow by over two percent.

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