Retreaders Hopeful for a Rebound in Latin America

July 15, 2016

Low truck tire prices have created a crisis for retreaders in Latin America, but industry leaders say there are signs of a rebound, and they believe the worst is behind them.

Heriberto Romero, CEO of Hules Banda, told attendees of the Latin American and Caribbean Tyre Expo in Panama City, “We’ve already reached rock bottom. We do feel there is a slight uptick. The numbers don’t lie. We’re seeing volume that is trending upward.”

And though that’s welcome relief, Romero also points to plenty of opportunity for retreaders to expand their reach in Latin America. Eighty percent of fleets are operated and managed by individual truck drivers, and only 20% are handled by large fleet companies.

Large fleet operators already are monitoring their mileage and tire wear, Romero says. There’s a big learning curve for individual drivers to catch up, which means there’s also a big opportunity for retreaders to be part of a more economical, long-term solution.

“We’re going through a crisis right now. Crisis also means opportunity. How do I do more with what I already do?”

Romero says one option is to look beyond the tires for more sales. In his business, he’s turned to selling lubricants. Truck service, shocks, batteries and alignments are all additional selling opportunities. “We need to have a bigger portfolio.” And a dealer’s existing sales staff can handle an expanded portfolio without requiring a salary increase, he says.

Jean Alexander Barros, Vipal Rubber Corp.’s coordinator of commercial products in Mexico and Central America, also believes retreading is on its way back in the region. In Mexico, Barros says the number of new tires sold each month grew from 333,000 in 2012 to 583,000 in 2015. At the same time, retreaded tires dropped from 142,500 per month to 100,000 in that same three-year period.

Barros says dealers need to teach this lesson: “Cheap ends up expensive.”