Replacement passenger tire shipments top 185 million in 1998.

Due to a strong U.S. economy, competitively priced imports and continued increase in the average miles driven per year, the tire industry set records for shipments in over seven replacement and original equipment (OE) tire markets in 1998. Statistics released by the Rubber Manufacturers Association show that the several key markets included:

* Replacement passenger tires which grew to a record 185.5 million - an increase of six million units, or greater than 3% over 1997 levels;

* Replacement light truck (LT) Pmetric tires (passenger tires with light track appearance and tread characteristics usually found on sport utility vehicles [SUVs]) - increasing by 1.7 million units or 13% for a total of 14.5 million units in 1998; and,

* Replacement medium and wide-base commercial truck tires which reached 13.7 million units - an increase of one million units or nearly 8% growth over 1997 numbers.

The RMA sees this trend continuing in 1999 for most of the major categories, equaling or exceeding the growth that occurred in 1998. Looking ahead to 2004, replacement passenger tires are anticipated to increase by over 7% to 199 million, replacement LT P-metric to increase by over 60% to 23 million and replacement medium and wide-base truck tires to gain nearly 12%, exceeding 15 million units. The RMA based its assessment on several key proprietary and government reports including projected auto industry sales data, gross domestic product (GDP) forecast trends through 2004, vehicle scrap rates, annual miles driven and vehicles-per-licensed-driver.

Another significant trend released by the RMA includes the sales of SUVs and pickup tracks to exceed the sales of passenger cars before the year 2001. These vehicles use either light track tires (tires with LT designation on the sidewall) or P-metric light truck tires.

Similar to their P-metric counterpart, LT tire categories also experienced record shipments and strong forecasted growth through 2004, with OE LT tires recording seven million units shipped in 1998, and should increase an additional 20% over five years, as well as replacement LT tires which are expected to increase by 26% over their 31 million 1998 levels. The combined size of the LT and P-metric LT replacement market was tallied at almost 46 million units shipped for 1998, which will expand to 63 million units, or an increase of 37%, by 2004. Other viable segments of the passenger tire markets are the H, V and Z speed-rated tires, accounting for 19.4 million units in 1998, and performance-rated tires, which reached 56 million units in 1998. The RMA forecasts continued growth for these markets to approximately 30 million units for an increase of 52%, and 65 million units, a 16% increase, respectively, by 2004.

One wild card in forecasting future demand of passenger and truck tires is the disparity in economic growth between the U.S. and other global economies. The continuing strong dollar and the weak Asian economies allow for very competitively-marketed tires to be imported to the U.S. This may eventually undercut market share of domestic U.S. manufacturers.

The RMA's tire statistical committee is comprised of tire market analyst professionals representing the major U.S. fire manufacturers, which account for over 90% of all U.S. fire shipments. Their analysis and forecasts of current and future industry activity include a review of RMA tire industry reports and other economic data, such as government trade figures, domestic growth projections and forecasted vehicle production. The RMA develops its consensus view for tire demand from this process.