WASHINGTON (March 19, 2001)—Strong economic conditions in much of 2000 plus the effect of Bridgestone/Firestone Inc.´s 6.5 million tire recall led to a record-setting year for passenger, light truck and medium truck replacement tires, according to the Rubber Manufacturers Association´s latest data.
Overall, the combined auto and truck tire shipments achieved a record in 2000 exceeding 321 million units, up 1.4 percent from the record 316.6 million units in 1999, the RMA said.
A combination of the softening U.S. economy and cuts in both the light vehicle and truck production schedules means that 2001 shipments will decrease significantly in the passenger and medium truck original equipment sector while the three replacement sectors experience only slight to moderate growth.
RMA´s Tire Market Analysis Committee (TMAC) released its 2000 tire shipment report and 2001 forecast. It expects a turnaround as the economy gets back on track in 2002, leading to growth rates in tire shipments of 2 percent a year through 2006—a figure that approximates recent historical growth rates.
RMA President and CEO Donald Shea said: "Tire manufacturing can be considered a reasonable barometer of overall economic conditions, and as such, is expected to weather economic downturns and fluctuations similar to other manufacturing sectors such as autos, light trucks and commercial trucks."
After a slight 5 million unit decline in 2001, car and truck tire shipments are projected to rise overall for 2001-2006, according to the TMAC report. In 2006, shipments are expected to break the 350-million-unit level.
Other tire markets with projected higher-than-average industry growth rates for 2001-2006 will be the H, V, and Z speed-rated and the cosmetic performance-rated passenger replacement tires, the RMA said. These segments are forecasted to grow at an 8.5 percent and 3.3 percent annual rate, respectively.
The TMAC cited the Gross Domestic Product and Industrial Production Index as the basis for growth patterns in tire shipments. The TMAC also presented several key figures for 2000 and 2001 projections for several tire segments.
Replacement tire shipments rose 3.6 percent to a record 198.9 million units from 1999´s 191.9 million units. Most of this increase can be attributed to the P235/75R15 tire recall effort.
The P-metric light truck tire segment surged more than 47 percent from 1999 levels to 26.9 million tires. This increase was offset by a decrease in the broad tire category to arrive at the net gain of 7 million units in the total replacement category.
The Firestone recall bolstered 2000´s shipments, but it "borrowed" tires that would have been replaced in 2001 and 2002, the TMAC said. As a result, the committee forecasts total replacement passenger shipments for 2001 to rise by less than 1 percent to 200 million units.
Replacement shipments should resume a 1.5 percent to 2.3 percent growth patter to break the 220 million unit mark in 2006, according to TMAC data.
Meanwhile, OE tire shipments dipped 1.6 percent to 60 million units because of a slight decline in domestic vehicle production from the previous year, which saw record overall sales of more than 17.3 million units. However, the market is expected to decrease by 8 percent in 2001 when OE shipments will be near 55 million units but then rise to 58 million units by 2006.
Light Truck Tires
Shipments of replacement tires with an "LT" designation grew 1.5 percent to reach a record 34.3 million units. This growth trend will continue over the next six years, the TMAC said, as the proportion of light truck registrations increase.
The TMAC anticipates that 42.1 million units or a 3.5 percent growth will be realized in 2006.
OE light truck tire shipments dropped 12.9 percent to 7.3 million units in 2000 due to a maturing market in light truck sales and substitution of passenger P-metric tires.
The TMAC said domestic tire demand will plateau at this level in 2001 and 2002 as any growth in light truck sales will be met by imports. Demand then will rise to the 8.5 million unit level in 2006 as vehicle sales grow with the economy.
Replacement medium/wide-base truck tire shipments set a record of 15 million units shipped during 2000. The TMAC expects this sector to grow steadily at a rate of 1.5 percent through 2006 to 16.4 million units after experiencing a slight 2 percent downturn in 2001 to 14.7 million units.
The OE shipments fell 19 percent to 5.6 million units as commercial truck vehicle sales slowed "dramatically" and sales of a large inventory of commercial truck vehicles failed to materialize. For 2001, the TMAC is forecasting that this category will experience a 22-percent drop to the 4.4 million unit level before shipments pick up again in 2002 to approximately 4.8 million units.
Medium truck tire shipments should eventually exceed 6 million units again by 2006.