China tire sales to advance 10%, -Sumitomo Rubber

Tire sales in China, the largest rubber consumer, will grow at three times the global rate as car ownership increases, Sumitomo Rubber Industries Ltd. said.

Sales will increase about 10 percent a year from almost 150 million tires in 2009, compared with a global gain of 3 percent, President Tetsuji Mino said in an interview. Still, the current level of global prices will not be sustained, he said. Sumitomo Rubber is the second-biggest tire maker in Japan after Bridgestone Corp.

China overtook the U.S. as the world's largest auto market last year as government stimulus policies boosted sales by more than 40 percent. Surging demand helped increase consumption of natural rubber used in tires, doubling the price in 2009.

"We are sure that China is the most promising market," Mino said in Tokyo on March 12. "Car ownership is spreading from wealthy people to ordinary consumers."

Motorists replaced about 100 million tires in China last year, or about 11 percent of global sales, while new vehicles needed as many as 50 million tires, Mino said. Car sales may slow if China boosts interest rates, while replacement tire demand will stay strong, regardless of policy, he said.

Global "prices have stayed around a historically high level," Mino said. "I personally don't expect the current level will be sustained given market fundamentals."