Passenger tire retreads: Rising from the ashes in Europe
There used to be a time, some 20 years ago, when millions of retreaded passenger tires were sold in the United Kingdom and Europe. Since then, however, this particular market has suffered what can only be described as a catastrophic “fall from grace.” From 1996 to 2006, sales declined alarmingly, sending the market into an almost terminal tailspin.
A number of prominent car tire retreading production plants closed, and by 2008, the number of units sold slumped to between 1 million and 2 million in Europe. The reason for this collapse can be attributed to several important factors, including the dramatic growth of cheap imported budget brands from China and other Far Eastern countries.
As a result, many European tire dealers suffered from a “brand differentiation” problem. Quite simply, they had to choose between stocking the competitively priced budget tires and retreads. Around the same time, Brazil decided to completely ban the import of passenger tire retreads to protect their own retreading market. In effect, the retreading of car tires was on its knees in Europe.
However, there have been encouraging signs that this once strong manufacturing tradition is showing signs of making a comeback. There is no doubt that car tire retreads are once again a topic of conversation in the European tire market. Perhaps the significant turning point came at the recent Brityrex Show in the UK, when seven passenger tire retreading companies exhibited at the event.
I recently met up with David Wilson, director of the Retread Manufacturers Association (RMA) and publisher of the global magazine Retreading Business, to discuss the reasons behind this dramatic, “phoenix-style” rise from the ashes for car tire retreads.
Wilson points out that the market has enjoyed a resurgence because of three main developments, primarily the continued rising cost of imported Chinese tires following the withdrawal of support by their government, followed by a worldwide tire supply shortage. Add to this the general economic situation in Europe (which affects the UK), and it is hardly surprising that passenger tire retreading has been given another opportunity to attempt a revival.
“This time, retreaders seem to have approached the market in a different way. In the past, the main objective was to produce large volumes of tires, but now they appreciate the value of sustainable growth with passenger retreads being promoted within a specialized niche market.
“Retreaders also realize the importance of smaller volumes, as well as expanding into other new market segments such as winter and 4x4 patterns as well as motorsport.”
The general opinion seems to be that although passenger tire retreads are back on the menu, not many tire retailers will want to return to stocking them as a main line. Retreaders are looking at other ways to market their product, including the Internet and eBay as alternative marketing channels.
Wilson also points out that realistically, he does not expect the market to return at the same level as it was before. He firmly believes there is enough potential to gain back some market share, however.
At the moment, retreaded passenger tires only amount to around 1% of the European market, but it will be interesting to see if the market can reclaim some of the market share it used to command. Certainly the signs are positive, and Wilson feels that as long as the product is cautiously marketed and promoted through the right sales channels, 2013 may well be the year that more vehicles on European roads will be fitted with retreaded car tires.
Only time will tell, and I intend to keep a close watch on developments with interest. ■
John Stone has been working within the global tire industry for the last 20 years. In 2004, he launched his own company, Sapphire Media Services, as a business media consultant with clients around the globe. Stone also writes for tire and automotive related publications in Europe, South Africa and Asia.