Demand for tires from U.S. consumers should grow steadily at about 2 percent annually through 2008, according to the latest shipment forecast from the Rubber Manufacturers Association.
Domestic shipments rose 2.6 percent last year to 308.4 million, with the growth coming entirely from imports, the RMA data show. Imports grew 14.3 percent, to 96.4 million units, to account for 31.3 percent of the domestic market.
Production, on the other hand, fell 0.5 percent to 245.3 million units, according to the RMA data, after falling 10.9 percent in 2001 vs. 2000. The drop-off was entirely in the passenger tire sector, where output fell 2.4 percent; by contrast, production of light and medium truck tires was up 4.6 and 17.3 percent, respectively.
Exports of tires by RMA member companies improved 3.3 percent, to 33.5 million units.
While the trend overall is for steady growth, the outlook varies according to category.
For instance, demand from domestic car makers for passenger tires is expected to fall 1.6 percent this year, to 56.4 million units, and then stay at that volume for the next five years.
The RMA attributes the no-growth forecast to the car companies' low- or no-interest buyer incentive programs taking sales away from later years, to car buyers' shifting preference for sport-utility vehicles/light trucks and to vehicle manufacturing shifting to off-shore plants.
At the same time, original equipment demand for light truck tires is seen growing more than 3 percent a year through 2008 as U.S. consumers buy more SUVs at the expense of traditional passenger cars.
In the replacement passenger tire market, the RMA sees demand growing nearly 3 percent this year and next-to 202 million units in 2004-as the millions of P-metric light truck tires shipped in 2000 and 2001 as part of the Firestone Wilderness/ ATX/ATX II replacement programs will be wearing out.
In addition, demand for low-profile, speed-rated high-performance tires continues to grow, the RMA said. In 2002, exceptionally high demand for these higher-priced tires offset a double-digit decline in shipments of the P-metric light truck tires caused by the ``pull-forward'' effect of the Ford/Firestone replacement programs.
Replacement market demand for light truck tires jumped 5.2 percent last year, to 33.6 million units, and should grow more than 3 percent annually through 2008 as SUV/LT owners increasingly turn to true light truck tires to replace their P-metric LT tires, the RMA said in its forecast.
The makers of medium/wide-base truck tires enjoyed a strong year last year, as OE demand jumped 12.4 percent.
Original equipment growth last year was based in part on a one-time phenomenon-robust sales of Class 8 trucks following the introduction in October of stricter emission standards, the RMA said.
It expects demand to grow 7.3 percent this year and more than double that in 2004, as the anticipated rebounding of the economy spurs sales of trailers and tractors.
In the aftermarket, shipments of medium/wide-base truck tires grew 8.2 percent last year and should edge up about 2 percent this year on the strength of an expected rebound in industrial production, the RMA said.
In general, the RMA's Tire Market Analysis Committee cites steady growth in the nation's Gross Domestic Product and Industrial Production Index for its outlook.
Likewise, the RMA sees shipments of tread rubber growing 1.4 percent as demand for retreaded tires-primarily truck tires-grows on the strength of industrial growth, especially in the construction industry. The RMA's Tread Rubber Market Analysis Committee anticipates production of 16.5 million retreaded tires in the U.S. this year.
Positive freight trends will continue to drive this growth through 2005 at an annual rate of 2.7 percent, according to the RMA's forecast.