National Press Release

Rebound anticipated in 2010 for both consumer and commercial sectors

WASHINGTON, March 16 /PRNewswire-USNewswire/ -- Tire shipments are projected to drop more than 7 percent in 2009 following a nearly 9 percent drop in 2008, according to the Rubber Manufacturers Association.

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Total 2009 tire shipments are projected to decline approximately 21 million units to 261 million, a level last experienced in 1993 and approximately 60 million units fewer than the 321 million unit peak in 2000.

The decrease in tire shipments reflects the continued erosion of consumer confidence, higher unemployment, depressed auto sales, a decline in vehicle miles travelled and downward revisions in domestic economic conditions for both the consumer and commercial sectors.

A turnaround is projected to begin in 2010, in line with economic forecasts, where the industry is expected to realize a modest recovery nearing the 270 million unit level.

RMA's Tire Market Analysis Committee forecast for key categories and their respective segments for 2008 include:

    --  Original Equipment Passenger Tires:  Decreases in domestic vehicle
        production led an 18.7 percent decline to 37.6 million units in 2008. 
        Further decreases in domestic vehicle production will result in a nearly
        22 percent decrease in 2009 shipments to approximately 29 million units.
        However, as the economy emerges from the recession in 2010, a rebound in
        vehicle sales and subsequent vehicle production is anticipated, which
        will result in a nearly 6 million unit recovery in this category.  Note
        that this projection does not account for any changes to the auto
        industry as a result of recent federal intervention and/or the potential
        for bankruptcy.
    --  Original Equipment Light Truck (LT) Tires:  The combination of consumer
        demand for vehicles with higher fuel economy, a shift in vehicle
        fitments to P-Metric passenger tires and market share increases by
        import vehicle manufacturers, will all continue to significantly impact
        light truck vehicles fitted with LT tires.  As a result, this category
        experienced a decrease of 34.5 percent in 2008 for a total of 2.9
        million OE units.  For 2009, another 900,000 unit decrease is
        anticipated owing to the slower economic conditions and its impact on
        the commercial sectors that utilize light truck vehicles.  However, a
        nearly 300,000 unit gain is anticipated in 2010.
    --  Original Equipment Medium/Wide-Base/Heavy On-Highway Commercial Truck
        Tires: For 2008, this category decreased by 17.6 percent to 3.8 million
        units, attributable to the larger than anticipated economic slowdown in
        the commercial sector.  Given the further decreases in economic activity
        forecasted for this sector in 2009, another nearly 30 percent decline to
        approximately 2.6 million units is anticipated.   However, the economic
        rebound projected for 2010 along with pent up demand for vehicles is
        projected to result in a net gain of approximately 600,000 units
        increase in shipments.
    --  Replacement Passenger Tire: The slowing economy, decline in vehicle
        miles traveled and consumers squeezing more miles out of their tires,
        all contributed to a 10.2 million unit decline, a decrease of 5 percent,
        for a total of 193.8 million units in 2008.  Furthermore, given the
        expected soft economic conditions for 2009, the market will realize
        another decrease of nearly 3.5 percent, or approximately 7 million
        units, reaching a level of 187 million units -- a figure that
        approximates passenger replacement shipments of a decade ago.  Growth is
        anticipated to resume in 2010 with the replacement sector estimated to
        increase by approximately 3 million units, or less than 2 percent,
        mirroring the projected measured growth in the consumer sector.
    --  Replacement Light Truck Tire: This market segment realized a drop of 14
        percent, or 4.8 million units, for a total of 29.4 million units in
        2008.  Although the number of vehicles for this market remains steady
        and largely represented by small commercial vehicles, declining economic
        conditions and fewer vehicle miles travelled will contribute to a nearly
        8 percent decline in replacement LT tire shipments in 2009.  However, an
        increase of nearly 6 percent is anticipated in 2010 in step with
        commercial economic forecasts.
    --  Replacement Medium/Wide-Base/Heavy On-Highway Commercial Truck Tires: 
        This market declined to 14.8 million units in 2008, a decrease of nearly
        1.7 million units or 10.4 percent.  The market will realize another
        decrease of 1.6 million units in 2009 as fewer goods will be transported
        as a result of the economic slowdown and protracted recovery.  But given
        the economic rebound forecast for 2010, this market is expected to
        increase to nearly 14 million units.

The Rubber Manufacturers Association is the national trade association for the rubber products industry. Its members include more than 80 companies that manufacture various rubber products, including tires, hoses, belts, seals, molded goods, and other finished rubber products. All RMA press releases are available at www.rma.org.

SOURCE Rubber Manufacturers Association