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Japan 2009 tire output may fall 5%

Tire production in Japan is expected to fall 5% next year in terms of rubber usage as the global economic crisis takes its toll on car demand worldwide, Japan's tire maker industry group said on Wednesday.

Japan is the world's third-biggest rubber consumer after China and the United States, and tire production accounts for about two-thirds of Japanese demand for new rubber.

In one of the first such forecasts for the Japanese auto industry next year, the Japan Automobile Tyre Manufacturers Association (JATMA) also said domestic auto sales were likely to fall 7% to 4.7 million vehicles next year.

JATMA said tire output, including exports, may fall to 1.28 million tons of rubber used in 2009, down from an estimated 1.35 million tons this year. That would be the lowest since 2004.

The association's forecast year-on-year tire output drop was narrower than its estimate for about a 9% drop in automobile output next year to 10.7 million vehicles as it expects relatively solid demand for replacement tires.

“Tires are consumables. We don't expect demand for replacement tires to fall as much as that for new tires,” Yukinori Hashimoto, assistant manager at Sumitomo Rubber Industries Ltd's tire planning and coordination department, said in a briefing.

“Sales of winter tires fell in double digits in November, when economic deterioration affected employment and spending here. But we expect a narrower decline in sales next year,” said Hashimoto, who compiled JATMA's forecasts.

The association forecast that exports by Japanese tire makers would total 69.1 million tires next year, down 8% from 2008. Its estimate for domestic tire demand came to 121.9 million tires, down 6% from 2008.

Natural rubber accounts for about 60% of the rubber used in tire production in Japan and the remainder comes from synthetic rubber, a petrol product.

Last month, the International Rubber Study Group revised down its estimate for global rubber consumption for 2009.

It now expects global demand to fall 3.3% to 22.52 million tonnes next year from estimated 23.29 million tons in 2008.

Automakers all over the world are under severe pressure to slash production in line with a sudden downturn in the global economy that is curbing demand for new cars.

The Japan Automobile Manufacturers Association is set to announce its own forecasts for next year on Thursday. In prior to the forecasts, Nissan Motor Co Ltd, No.3 in Japan, said it would cut its domestic output for the business year to the end of March by an additional 78,000 units, starting in January.

Japan's No. 2 Honda Motor Co also on Wednesday cut its annual operating forecast by two-thirds. (Reuters)