WASHINGTON (March 26, 2002)—The continuing fallout of the Firestone Wilderness recalls of the past two years will skew replacement market demand in the coming years, according to the latest Rubber Manufacturers Association shipment data and forecast.
Owners of light trucks and sport utility vehicles, conscious of the tread separation hysteria of 2000-2001, are expected to opt for more rugged LT-designated light truck tires to replace their original equipment P-metric light truck tires, the RMA said. This demand shift will push LT replacement shipments up this year by 4.8 percent and contribute to a 16-percent drop in demand for P-metric light truck tires.
In addition, the RMA's Tire Market Analysis Committee (TMAC) sees growth in two other replacement market segments: medium and wide-base truck tires, where shipments should grow 1 percent this year and 6 percent in 2003, and in H/V/Z-speed-rated passenger tires, where shipments will be up 11 percent this year and next. Replacement passenger tire sales this year are expected to be essentially unchanged from 2001, at 190.8 million units, after falling 4.1 percent last year.
Overall, the tire industry experienced a 6.6-percent decline in original equipment and replacement shipments in 2001, attributable to the recession and consumer uncertainty after Sept. 11, the RMA said.
The TMAC estimates more than 21 million fewer passenger and commercial tire units were shipped in 2001, compared with the record-setting 321 million units in 2001.
Little or no growth is anticipated for 2002 as the economy begins a slow turnaround, but a 4.7-percent rebound is forecast for 2003, when total units shipped is expected to be approximately 316 million, just shy of 2000 figures. The TMAC cites the Gross Domestic Product and Industrial Production Index for 2002 as the basis for this forecast trend where leading economists expect the GDP to grow by just 1 percent and the IPI to shrink by 1.3 percent.
However, 2003 promises to be the turnaround year with the GDP forecast to grow 4 percent and the IPI by 7.5 percent.
Shipments of replacement passenger car, light truck and commercial truck tires all saw moderate decreases in 2001, from more than 4 percent for passenger tires to nearly 10 percent for commercial truck tires.
However, further declines in the passenger replacement markets were offset by 10.6-percent growth in the speed-rated performance market and a 10.2-percent surge in the P-Metric light truck tire market. That was mostly a result of Ford Motor Co.´s replacement program for 13 million Firestone tires on its Explorer SUV, which comes to an end March 31.
It said the P-Metric light truck tire replacement market will decline by more than 15 percent this year due to demand being pulled forward into 2000 and 2001 from recall and replacement programs.