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1999 Replacement Tire Shipments to Reach 191 Million Units

31 August 1999

1999 Replacement Tire Shipments to Reach 191 Million Units; OE Light Truck Tires to Grow Nearly 17%, Says RMA

    WASHINGTON, Aug. 30 -- The Rubber Manufacturers Association's
(RMA) Tire Market Analysis Committee (TMAC) has revised their 1999 tire
shipments projections, reflecting the ongoing strength of the U.S. economy.
    Key 1999 market forecasts include:

    *  Original Equipment Passenger Tires are now anticipated to reach 60
million units, a growth of 5% over 1998 figures;
    *  Replacement Passenger Tires, which grew to a record 185.5 million in
1998, are now expected to reach approximately 192 million units in 1999, a
3.4% growth over 1998;
    *  Replacement Light Truck (LT) "P-metric" tires (passenger tires with
light truck appearance and tread characteristics usually found on Sport
Utility Vehicles (SUV's)) -- are projected to grow an additional 3 million
units (over 19%) compared to the 1998 level of 14.5 million units;
    *  Original Equipment "LT" Designated Tires will also see strong growth
with a projected 17% growth over 1998 -- surpassing the eight-million unit
mark in 1999; and
    *  Replacement Medium & Wide-base commercial truck tires which reached
13.7 million units in 1998 -- an increase of one million units or nearly 8%
growth over 1997 numbers -- will add yet another one million units in 1999 for
an anticipated level of 14.7 million units.
    Principal factors used by TMAC to revise its 1999 projections included the
continued strong demand in the trucking sector, the increase of cars and
trucks in service, and the record- setting pace of Sport Utility vehicles
(SUV's) and Light Trucks (LT) sales.
    While this appears to be another record year for tire shipments, TMAC does
not envision this trend repeating itself anytime soon as the U.S. economy is
expected to show a more "sustainable" growth pattern -- an approximate 2.5%
annual growth in Gross Domestic Product -- which is in-line with private and
government economists' expectations. During this period, TMAC forecasts a
flat-to-slightly downward trend in the major OE tire markets, but continued
strong growth in the various replacement tire markets including passenger and
light truck markets.
    TMAC predicts these two replacement tire markets will experience an
approximate 2.5% and 5.8% average growth, respectively, with total shipments
of passenger replacement tires expected to break the 200 million unit level in
2001.
    One sector running counter to other category sectors is the farm tire
market. Here, the economic sluggishness in the agricultural sector has taken
its toll in every farm tire category, which is experiencing a 5% to 20% drop-
off in tire shipments. TMAC believes this will be short-lived and anticipates
the recovery to begin in 2000.
    TMAC is comprised of tire market analyst professionals representing the
major U.S. tire manufacturers, which account for over 90% of all U.S. tire
shipments. Their analyses 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. TMAC develops its consensus view for tire
demand from this process.
    The views expressed in this release are not the sole opinion of any one
committee member, member company, or RMA representative.