A Profitable Future for Tire Retreading?
All around the world the professional retreading of tires is considered to be an important aspect of our industry, especially when it comes to the commercial vehicle sector, and Europe is certainly no exception.
First and foremost, although the European tire retread market is once again increasing in popularity, it is still affected by the continuing rise in Chinese tire imports. This remains a real threat to a retread company’s growth and success.
However, I have noticed the start of a, shall we say, “mini revolution” that seems to be taking place within the retreading market throughout Europe, with a growing number of companies accepting that the very nature of the way they do business has to change. I have spoken to several leading retreaders just recently, and the general feeling is the future of the industry will depend on whether retreading businesses can or are willing to adapt to these important and essential developments that need to happen.
It is generally felt there are a number of benefits to be gained from an approach that takes into account the whole life cycle of a commercial tire, including a cost per kilometer analysis that promotes the option of retreading as very viable and effective for truck fleets.
Historically, European retreaders have usually marketed their tires as a budget option to new tires, which works as long as the price difference between new tires and retreads remains significantly wide enough. However, the problems have arisen when the price difference narrows, and this has always been the elephant in the room for the market.
It is true that there has always been many valid arguments in favor of tire retreading, both economic and environmental, but in my opinion the way forward is for retreaders to look at and improve their communication skills and get the message across much more forcibly about the merits of fleet cost per kilometer.
I believe ambitious retreaders have to bring fleet management services into their product presentations and urge their fleet customers to effectively manage their vehicles’ tire pressures, mileage return and overall condition of their tires. They of course need to include alignment in order to significantly improve the overall mileage return of their tires.A number of influential European tire retreaders firmly believe the future of successful and profitable tire retreading lies in being able to consistently provide an appealing value-added level of service and also gain more easy access to potential customers even more efficiently.
For some ambitious retreaders this way forward may well mean having to look seriously at launching their own distribution outlets or maybe introducing a range of commercial tire fleet management services. Also, another way forward to create even more additional profit margins could be in diversifying into other products such as tire and wheel servicing equipment and accessories.
So far I have talked about commercial tire retreading, but of course in Europe there is still a slightly less but continuing car tire retreading market, although it can be clearly stated that the days have now completely disappeared where there is a big market for standard retreaded passenger tires.In fact, this market has already led by example and diverted into, at the moment, a growing demand for tires in particular niche markets such as special winter tires and tires for 4x4s and for other off-road vehicles where a unique tread pattern is needed for specific driving uses. At the same time, retreaded tires are also popular in some areas of motorsport where tire requirements are very specific such as individual compounds.
I feel that although there will probably be some further consolidation in the market, there is still a future for tire retreading. It’s just about how well retreaders approach the future. ■
John Stone has been working within the global tire industry for the past 27 years. In 2004 he launched his own consulting company, Sapphire Media Services, which caters to business media clients around the globe. Stone also writes for tire and automotive-related publications in Europe, South Africa and Asia.
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