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Shipments levels expected to drop in '06-RMA

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U.S. tire shipments in 2006 will fall by 2.8 percent-or 8.9 million units-from last year's levels, according to the Rubber Manufacturers Association (RMA), which based its latest forecast on lower first half shipments and the overall slowdown in the U.S. economy.

The latest forecast contrasts with an earlier version issued in March, in which the RMA predicted a 1.2-percent shipments rise.

The RMA said the revised forecast reflects the slowing U.S. economy, noting that GDP growth in the second quarter slowed to 2.5 percent from 5.6 percent in the first quarter. Slower economic growth and higher energy costs are forcing consumers to prioritize spending, including postponing tire replacement, it said.

Shipments from January through May of 138.1 million units were down 4.3 percent from the same 2005 period , but the latest RMA figures show the continuation of a trend started several years ago-domestic production dropping and imports increasing.

The RMA said growth should resume in 2007 with total tire shipments expected to rise about 2.3 percent, or 7 million units to 319 million.

The RMA also forecast the following:

* Shipments of replacement passenger tires will fall by about 4.6 percent to about 198 million units, although P-metric (SUV-type) and high-performance tires should see some gains. Shipments in 2007 should rebound to about 205 million units;

* Shipments of replacement light truck tires will fall 7.6 percent to 33.3 million units as drivers switch to crossover and smaller sport-utility vehicles that use P-metric passenger tires vs. light truck tires;

* Shipments of replacement medium/wide-base/heavy commercial truck tires will fall about 2 percent to 17.2 million units but should rebound in 2007 to 17.6 million units.

* Original equipment (OE) passenger tire shipments will fall 2 percent to about 51 million units with no growth expected in 2007;

* OE light truck tire shipments will hit 5.6 million units and 2007 should see a 5.6-percent gain (the category no longer includes service trailer tires, so a 2005 comparison is not valid); and

* OE medium/wide-base/heavy commercial truck tires will increase 5.7 percent to 6.6 million units in 2006 followed by a steep decline of 16 percent in 2007 as fleets buy ahead of new Environmental Protection Agency guidelines.

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