It was shaping up to be an interesting, action-packed year for United States-based retreaders long before the COVID-19 pandemic hit.
But the coronavirus outbreak and subsequent government actions have created a wave of uncertainty that didn’t exist even eight weeks ago.
Before this unprecedented development, MTD reached out to the U.S. retreaded truck tire market share leaders – Bridgestone Americas Holding Inc. (Bandag), Goodyear Tire & Rubber Co., Michelin North America Inc., Maragoni Tread North America, Continental Tire the Americas LLC and Vipal USA (see chart for their current positioning) – and posed the following three questions to their top retread executives:
- What’s your take on the current state of the retread market as we prepare to enter the second quarter of the year?
- What trends did you observe during the first quarter of 2020 and how did they impact your retread business?
- What impact – if any – are tariffs and the ongoing trade war with China having on your retread business in the U.S.?
We also posed several questions tailored to their individual initiatives and situations. Of the six, all responded – with the exception of Goodyear, which declined to participate. By the numbers
In its January 2020 Facts Issue, MTD published several revealing statistics about the U.S. retread market, showing growth in nearly all of the following areas:
- In 2019, an estimated 14.5 million medium truck tires were retreaded in the U.S. versus 14.2 million tires the previous year.
- Retreaded truck tire sales in 2019 – without casings – totaled $2.4 billion, slightly up from $2.3 billion in 2018.
- The average retread in 2019 cost $165.90, slightly up from $164.64 in 2018.
- The average mold cure price last year was $165.07 versus $165.72 the previous year.
- The average pre-cure price in 2019 amounted to $165.93, compared to $164.60 in 2018.
- The average casing price in 2019 was $62.80 versus $57.46 in 2018.
Average sales margins increased in 2019, as well – reaching 20% versus 17% in 2018.
In 2019, MTD estimated that there were a total of 650 truck tire retread plants and 17 OTR tire retread plants in the U.S. And more retread plants have opened since the end of the year.
What about tariffs?
Tariffs continued to be a prime concern among retreaders in 2019 and into the new year.
The market has now had enough time to sort through the tariff implementation and how it affects not only the supply of low-cost Chinese imports, but also the overall commercial tire business.
“The situation is very fluid, making it difficult to predict the future,” Eric Higgs, president, truck, bus and retread tires, U.S. and Canada, Bridgestone Americas Tire Operations, told MTD.
“In 2019, the implementation of tariffs caused somewhat of an unknown on what was to come,” says Clif Armstrong, Marangoni’s CEO and president.
However, he believes that “the market has now had enough time to sort through the tariff implementation and how it affects not only the supply of low-cost Chinese imports, but also the overall commercial tire business.”