RMA predicts 2% tire shipment increase.

Tire shipments for 2005 are expected to increase by nearly 2% compared to 2004 due to continued steady economic growth in the consumer and commercial sectors. Additionally, higher gasoline prices do not appear to have had an effect on U.S. driving behavior.

Absent a change in driving behavior, steady growth in tire shipments is expected to continue over the next several years as the economy continues its moderate growth pattern, according to the Rubber Manufacturers Association.

The group projects continued annualized growth of approximately 1.8% for total tire shipments through 2010, reflecting increases in the nation's gross domestic product (GDP) and industrial production index (IPI).

Overall, the combined original equipment (OE) and replacement shipments for 2005 auto and truck categories are anticipated to increase by 6.1 million units to nearly 325 million units, compared to 318.5 million total shipments in 2004. By 2010, this figure is projected to be approximately 355 million units.

Original equipment passenger tires

An increase of a little more than 1%, to approximately 54 million units, is projected for 2005, reflecting a slight increase in domestic light truck production and demand for p-metric light track tires. Little growth is expected through 2010, as total shipments stabilize at nearly 55 million units owing to a slowing of domestic auto production and increased sales of off-shore vehicle imports.

Original equipment light truck tires

A decrease of 400,000 units to 7.5 million units is expected for 2005, as consumers opt for smaller-sized sport utility and light truck vehicles, which are fitted with the p-metric passenger tires. Shipments are expected to top out at 8.6 million units by 2010, for an annualized growth rate of 2.9% as a result of growth in both the commercial sector and service trailer tires.

OE medium/wide-base truck tires

Sales of commercial truck vehicles will experience solid growth through 2006, due to replacement demand and in response to future changes in EPA regulations. The net effect will be a nearly 15% growth, or an approximate unit increase of 900,000 in OE shipments for 2005 to 6.6 million units. Growth is expected to continue in 2006 at more than 5% to 7 million units, but will decline to nearly 6.4 million units in 2010 as stricter emission standards are put into effect in 2007 and 2010.

Replacement passenger tires

The passenger replacement market will increase by 2% to over 203 million units for 2005, representing a gain of 3.9 million units over 2004's shipments. The increase in this category is due predominantly to the high and ultra high performance tire markets within this category growing at over 6%t and 14%, respectively, compared to 2004. Overall, the passenger replacement market will continue to increase at approximately 2% per year through 2010, at which point the total units shipped will approach 225 million. Steady growth in this segment is largely attributed to continued growth in the number of vehicles on the road and increasing vehicle miles traveled. To date, higher fuel prices do not appear to have affected U.S. driving habits.

Replacement light truck tires

This market segment is projected to increase by l million units to 37.4 million units in 2005, with continued growth through 2010 at an average annualized growth rate of approximately 2.4%, or more than 42 million units shipped.

Replacement med./wide-base truck tires

This market is forecasted to grow to approximately 16.5 million units in 2005, mainly as a result of the continued growth in industrial production. Further growth of a little more than 3% will be realized for 2006, at which time shipments are estimated to be 17 million units. Shipments are projected to rise above this level by 2010.