The RMA revealed yesterday just how tough the year will finish: Tire shipments will be down 4.5% overall compared to the record-setting results of 2005.
RMA said the decrease in tire shipments “reflects the overall slowdown in the U.S. economy during 2006,” driven by a shrinking GDP, higher energy costs, and a declining housing market. OE and replacement segments combined in all categories shows shipments will be down some 14 million units to a total of 306 million tires.
The trade group has adjusted its shipment predictions twice in 2006, reflecting the shifts and uncertainty of the market. For the first six months of the year, most experts agreed that shipments were down in the 6%-7% range. Shipments rebounded slightly in the second half as gas prices stabilized.
For 2007, RMA projects a modest rebound, with total tire shipments expected to increase by nearly 4 million units to 310 million units, or up some 1.4%.
Segment by segment, here is what RMA sees for the coming few years:
OE Passenger Tires: Projected to fall by more than 8% to approximately 48 million units in 2006 as a result of a decrease in North American passenger vehicle sales. No growth is expected in 2007, with total shipments remaining at around the 48 million unit level.
OE Light Truck Tires: Approximately 5 million units are projected to be shipped in 2006, to be followed by a 4% unit increase in 2007.
OE Medium/Wide-Base/Heavy Truck Tires: Approximately 6.8 million OE units will be shipped in 2006, up 9%. A sharp decline of approximately 20%, or approximately 1.5 million units, is anticipated in 2007.
Replacement Passenger Tire: The market will decrease by about 3.2% for 2006, to roughly 196 million units. P-metric SUV tires and UHP markets are projected to be up in 2006 by some 4% and 12%, respectively. Modest rebound of over 2% is forecasted in 2007.
Replacement Light Truck Tire: The segment will decrease by 7.2% percent to 33.4 million units for 2006 due to the increasing popularity and numbers of crossover vehicles and smaller SUVs that use P-metric tires.
Replacement Medium/Wide-Base/Heavy Truck Tires: The market will be down about 2% to 17.2 million units in 2006. Shipments are expected to increase in 2007 and reach 17.5 million units.
