Commercial Stability: New and Retreaded Truck Tires Go Hand-in-Hand
The domestic retreaded truck tire market was down in 2015 compared to 2014, no matter how you analyze it. The number of units declined nearly 4%, to 14.8 million units. And the average price of a retread decreased 2.1% to $232.43, although the dramatic drop in casing costs was responsible for that.
However, the health of the truck tire market also depends on new truck tire shipments. And they were up 4%.
When the two are combined, total shipments are pretty stable every year (see chart). Not counting 2009 — the heart of the Great Recession — the total has never dipped below 28.3 or risen above 33.1 in the last 22 years. The record of 33.1 was set in 2004.
“The outlook for the retread market in 2016 is expected to be stable,” says Paul Crehan, director of product marketing for Michelin Americas Truck Tires, a division of Michelin North America Inc. “The retread portion of the total tire market has been and will remain stable. The retread market has remained relatively constant for the past 20 years versus the new tire market.”
Catering to fleets
Tire dealers can help their fleet customers develop, if not oversee, written tire maintenance policies in order to provide the most value. They should cover the specifics of new replacement tires entering their respective fleets, and include a retreading policy.
“This policy should cover the casings, number of times a quality casing will be retreaded based on the vehicle usage, casing age and condition, tire position, type and quality of the new retreads,” says Crehan. “In most instances, a fleet rarely purchases casings to retread them, but rather utilizes the casing assets it already has in its fleet.
“This asset value is then not part of the cost equation of a retread versus a replacement tire.” ?