US Tyre Shipments to Drop 13% in 2009, Says RMA

The Rubber Manufacturers Association projects an approximately 13 per cent decline in US tyre shipments will occur in 2009, principally as a result of a sharp decrease in demand for original equipment passenger car and commercial vehicle tyres. Total tyre shipments are anticipated to reduce by approximately 36 million units to 246 million. The RMA notes this decrease reflects the “difficult economic environment for automotive manufacturers over the past year, continued low consumer confidence and high unemployment.” This year’s projected total shipments represents a 23.4 per cent decrease on the peak of 321 million units reached in 2000.

Vehicle miles travelled is on par with 2008 levels, the RMA reports, as domestic economic conditions for both the consumer and commercial sectors appears to have stabilised and are poised for a rebound in 2010. As a result, the tyre industry is expected to realise a nearly six per cent growth in 2010 and reach the 260 million unit level.

Large decreases in domestic vehicle production due to plant shutdowns have put a hefty dent in shipments of OE passenger car tyres. The RMA expects shipments of these items to decrease 43 per cent in 2009 to approximately 22 million units, and comments that the US government’s “cash for clunkers” programme pulled forward future years’ vehicle sales into 2009, mitigating an even steeper drop in OE tyre shipments.  An improving economy and a rebound in vehicle production and sales are anticipated in 2010, which the RMA anticipates will result in an extra eight million OE passenger car tyres shipped. This projection, however, does not account for any possible changes to the automotive industry from further federal intervention or consumer incentive programmes.

The OE light truck tyre category will experience a decrease of around nine per cent this year, the RMA believes. This drop of 300,000 units to nearly 2.7 million tyres is said to be the product of slower economic conditions and its resultant impact upon the commercial sectors that utilise light commercial vehicles. The RMA anticipates little or no growth for this sector in 2010 as US production of this type of vehicle is projected to remain weak.

Large declines are also anticipated for the OE medium/wide base on-highway commercial truck tyre sector. The RMA projects a fall of almost 41 per cent to approximately 2.3 million units in 2009. This equals a decrease of some 1.6 million tyres. The economic rebound anticipated for 2010 plus pent up demand for vehicles is projected to result in a net gain of around 350,000 units next year.

Shipments of replacement market passenger car tyres will decrease by about six per cent or 12 million units to 180 million, says the RMA. Growth is anticipated to resume next year, however, with the replacement sector estimated to increase by approximately four million units, or about three per cent, as economic conditions improve. Non-RMA imports accelerated in July and August prior to imposition of a three-year Chinese import tariff on September 26th.  These imports are anticipated to drop off dramatically in October and remain at depressed levels through the three-year period.

The replacement truck tyre segment, notes the RMA, represents a “core group of consumers” and the small commercial vehicle market, comprised mainly of ‘class 3’ trucks. The onset of economic recovery in the US has limited the scope of declining light truck tyre sales to nearly three million units, or 11 per cent, for a total of approximately 26 million units.  The RMA adds that little or no increase is anticipated in 2010 in keeping with commercial economic forecasts and the impact of the Chinese tyre tariff.

The replacement medium/wide base on-highway commercial truck tyre market is projected to decrease by approximately 2.3 million units in 2009 to nearly 12.6 million units.  Given the uneven economic rebound forecast for 2010, the RMA expects this market to increase by less than one million units to nearly 13 million units in 2010.