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U.S. shipments, production to continue fall

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U.S. tire shipments will slide 1.5 percent this year, rather than rise 3.5 percent as predicted earlier, according to a new forecast by the Rubber Manufacturers Association.

That's a swing of about 15 million units, or the output of about two average-sized U.S. tire plants.

Six months ago, the RMA's Tire Market Analysis Committee decided an upward trend of leading economic indicators showed industrial production and consumer confidence would perk up, according to a spokesman for the association. Then came the U.S.-led invasion of Iraq.

Since then, consumer confidence has been all over the map, and consumer spending generally muted. The effect has been telling on the tire industry.

Replacement market passenger tire demand was supposed to drive the industry's recovery, but instead it has flattened out. Original equipment passenger tire shipments were expected to be on par with 2002. Instead, they probably will fall 6 percent as the car makers' incentive-driven sales efforts have lost their luster.

U.S. tire production through May had fallen 10 percent vs. 2002 while imports continued to rise, echoing a trend of the past few years. Imports account for more than half of replacement truck tire shipments and more than a third of replacement passenger tires, according to an analysis of RMA and Department of Commerce data. Tire makers in China and South Korea, in particular, have increased their North American market share steadily.

Foreign tire makers aren't the only ones pumping up the import numbers. Both Goodyear and Cooper Tire & Rubber Co. have indicated this year they intend to step up their importing efforts, with Goodyear doubling the number of tires it sources from its overseas affiliates to more than 10 million units.

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