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Tire shipments to decrease in '06.

Tire shipments for 2006 are expected to decrease by 2.8% compared to 2005, according to the Rubber Manufacturers Association.

The decrease in 2006 tire shipments is said to reflect the overall slowdown in the U.S. economy. While GDP growth was a healthy 5.6% in the first quarter, second quarter growth slowed substantially to 2.5%. Slower growth and higher energy costs appear to be forcing consumers to prioritize spending, including postponing tire replacement, according to the RMA.

However, the RMA projects growth to resume in 2007, with the total tire shipments expected to increase by nearly 7 million units to 319 million units, or approximately 2.3%.

Overall, the combined original equipment and replacement shipments for 2006 auto and truck categories are anticipated to decrease by 8.9 million units to nearly 312 million units, compared to 320.8 million total shipments in 2005.

The original equipment passenger tire market is projected to decrease by more than 2% to approximately 51 million units in 2006 as a result of a decrease in domestic light vehicle sales and subsequent decreases in domestic light vehicle production. No growth is expected in 2007.

In the OE light truck tire market, approximately 5.6 milhon units are projected to be shipped in 2006. However, a 5.6%, or 300,000 unit increase in 2007 is forecast, as demand for small commercial trucks will remain strong.

Regarding OE medium/wide-base/ heavy on-highway commercial truck tires, sales of commercial truck vehicles will experience modest growth in 2006. As a result, 6.6 million OE units are forecasted to be shipped, or an increase of 5.7%.

The passenger replacement market will decrease by approximately 2.3% to nearly 198 million units for 2006.

The replacement light truck tire market segment is projected to decrease by approximately 7.6% to 33.3 million units in 2006.

The replacement medium/wide-base/ heavy on-highway commercial track tires market is projected to decrease by approximately 2% to 17.2 million units in 2006.
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Title Annotation:Perspectives
Publication:Rubber World
Date:Sep 22, 2006
Words:336
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