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Japan 2009 Tyre Output May Fall 5%

(Reuters) Tyre production in Japan is expected to fall 5% next year in terms of rubber usage as the global economic crisis takes its toll on car demand worldwide, Japan’s tyremaker industry group said on Wednesday.

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Japan is the world’s third-biggest rubber consumer after China and the U.S., and tyre production accounts for about two-thirds of Japanese demand for new rubber.

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In one of the first such forecasts for the Japanese auto industry next year, the Japan Automobile Tyre Manufacturers Association (JATMA) also said domestic auto sales were likely to fall 7% to 4.7 million vehicles next year.

JATMA said tyre output, including exports, may fall to 1.28 million tonnes of rubber used in 2009, down from an estimated 1.35 million tonnes this year. That would be the lowest since 2004.

The association’s forecast year-on-year tyre output drop was narrower than its estimate for about a 9%t drop in automobile output next year to 10.7 million vehicles as it expects relatively solid demand for replacement tyres.

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"Tyres are consumables. We don’t expect demand for replacement tyres to fall as much as that for new tyres," Yukinori Hashimoto, assistant manager at Sumitomo Rubber Industries Ltd.’s tyre planning and coordination department, said in a briefing.

"Sales of winter tyres fell in double digits in November, when economic deterioration affected employment and spending here. But we expect a narrower decline in sales next year," said Hashimoto, who compiled JATMA’s forecasts.

The association forecast that exports by Japanese tyre makers would total 69.1 million tyres next year, down 8 percent from 2008. Its estimate for domestic tyre demand came to 121.9 million tyres, down 6% 2008.

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Natural rubber accounts for about 60% of the rubber used in tyre production in Japan and the remainder comes from synthetic rubber, a petrol product.

Last month, the International Rubber Study Group revised down its estimate for global rubber consumption for 2009.

It now expects global demand to fall 3.3% to 22.52 million tonnes next year from estimated 23.29 million tonnes in 2008.

Automakers all over the world are under severe pressure to slash production in line with a sudden downturn in the global economy that is curbing demand for new cars. (Tire Review/Akron)

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