In preparation for Tyrexpo Africa, to be held April 10-12, 2018, at the Gallagher Convention Center in Johannesburg, South Africa, David Wilson, publisher and editor at Retreading Business and the publisher for three specialist magazines for the tire industry, shares his views on the overall outlook of the global commercial tire retread market. He also addresses the needs for tire retreading businesses to innovate for sustainable growth.
Wilson has close to 30 years of experience in tire journalism and founded his business in 1997. He also was director of the Retread Manufacturers Association, the trade association representing the interests of tire retreading companies in United Kingdom, for a decade. During his stint with the trade association, he had also spent two years as the secretary of BIPAVER, the Federation of European Retreading Associations and was concurrently contributing his works as a board member of the United Kingdom’s Tyre Industry Federation.
Here Wilson shares his views on the South African retread market with John Stone, Modern Tire Dealer's European Notebook columnist.
Q: Could you give us an overall outlook of the South African (SA) commercial tire retread market? Are there any factors driving or impeding its growth?
“The SA market is considerably developed with a long tradition of successful activities backed by the support of many local and international leading players in the retreading industry.
“Like all other retread markets around the world, the South African market has been adversely affected by the continuing rise in Chinese tire imports. This has since led to a change in the dynamics of tire retreading industry and the future will depend on whether companies can or are willing to adapt to these critical developments that are bound to happen and evolve for survival and growth.
“Also, the situation in SA is no different to anywhere else in the world. Hence, it makes more sense to analyse the future of commercial tire retreading from a global point of view.”
Q: You mentioned earlier about the need for tire retreading companies to adapt to survive and grow. Can you shed some light on this?
“Historically, retreaders had often marketed their tires as a budget option as opposed to new tires. This arrangement worked fine as the price differential between new tires and retread ones remained wide; it would not do so well if the pricing difference is narrowed. While there are many valid debates in favour of using retreading tires in view of its economic and environmental benefits, there is a lack of consistency and concerted effort in the way these benefits are being communicated within the industry.
“To ensure the survival and future success of the tire retreading market, the communities within the tire ecosystem need to create greater awareness of the benefits to be gained from an approach which takes into account the whole lifecycle of the tire, including a detailed cost per kilometre analysis which often help determine the viability and effectiveness of retreading for truck fleets.
“Companies would also need to go beyond their traditional solution offering and provide value added service for their customers. For some retreaders this might mean having their own distribution outlets, or introducing a range of fleet management services. For others, it might involve diversifying into products such as tire and wheel servicing equipment and accessories.
“Retreaders could also explore opportunities in the tire recycling sector. Furthermore, retreaders can improve the quality of their service to the end user and lifespan of their tires by bringing their fleet management services into the product presentation by having fleets to manage their tire pressures, mileage return and overall tire condition more efficiently.”
Q: With all these challenges and the pressure for companies to innovate, is tire retreading still a profitable business?
“It is indeed true that the good days have long gone where there is a big market for standard retreaded passenger tires. There is also a reduced demand for tires in niche markets, such as winter tires, 4x4, and off-road vehicles, where a unique tread pattern is needed for specific driving uses. Yet retreaded tires remains popular in some areas of motorsport where tire requirements are very specific which standard tires cannot fulfil.
“In my opinion, there will be some further consolidation in the market, but I firmly believe that there is still a future for tire retreading as a profitable business. It is about how best to approach what needs to be done. Retreaders tend to have strong technical expertise in rubber technology and the production of tires. What they need to improve on is the way they market their products and services in the most effective way."
