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RETREADING
The Future of the Retreading Market: Is it all Doom and Gloom?
If you speak to representatives from the retreading industry across Europe you would be forgiven for thinking that the world was about to collapse in on itself. The story espoused by many is of a disastrous collapse in the truck tyre retreading market, which threatens to be of a similar nature to that which
production from Ihle to their new plant in Hannover.
The main scapegoat for the difficulties being faced by some in the retreading industry is the increased influx of Chinese new tyres – and by these the industry does not really mean leading Chinese brands like Double Coin,
the budget truck tyre market, retreads undoubtedly come up against budget new tyres from China, and perhaps retreaders focusing on this sector will have their work cut out to remain competitive. However, it is also true that new tyre manufacturers have become more interested in retreading and have seen the value of retreads as part of the whole life package they offer to their fleet customers. Fleet management companies are also increasing their influence in the market and use retreads as part of their offering to get the best possible cost per mile from their clients’ tyres. Retreads are becoming more strongly accepted as part of a sensible tyre management strategy than ever before. With that being the case, is there not grounds for thinking that the future of the retreading industry is looking more rosier than it has been for a while. Are a few price merchants at the bottom end of the market really that important?
What is certain is that the
machiner y and tread rubber manufacturers reported buoyant demand at the recent Reifen 2014 exhibition in Germany. Mario Goldmann from shearography manufacturer Steinbichler told us that many of the medium and larger retreaders in Europe were now prepared to invest in equipment to improve the qualityof their retreads, which supports the argument that retreaders are looking to support a
appear to be much evidence to suggest a collapse in unit sales.
To support this theor y, the Retread Manufacturers Association recently announced an increase in production for RMA members for all sectors during 2013.
Truck retread production among association members rose to 463,591 units, an increase of 1.8%. (The total market is about a million units as Michelin and Goodyear’s figures are not included, as are several independent members, who are not in membership of the RMA) However, this masks a decrease in sales of pre-cured retreads, which fell by 4.7% to 115,676. Mould cure retreading continued to benefit from this, increasing by 4.1% to 347,915 units. The figures underlie the continued growth in strength of the country’s leading mould cure retreaders, Bandvulc, Vacu-Lug and Bulldog.
Light truck retread sales also increased by 2.5% to 56,765. Here there was a similar increase in mould cure sales at the expense of pre-cure but here the effect was more marked with mould cure growing by 10.0% at the expense of pre-cure, which fell by 9.2%.
So what does all this tell us about the UK retread market?
Firstly, it shows that the big five retreaders are all doing well and that mould cure continues to increase its share of the market. These top five retreaders are either new tyre manufacturers (Michelin,
Stefan Mayrhofer of Gummiwerk Kraiburg believes the European retread market has settled down to a stability somewhat below 2011 levels.
destroyed the passenger retread market around twenty years ago. Suffering particularly badly, it is said, are the main Western European markets such as Germany, which are being placed under severe price pressure, with the result that companies are going out of business. But how much truth is there in this? Is the retreading business in Europe really in danger of collapse, or is this just the industry’s response to having to face up to new challenges in the market place?
The state of the German market, it must be said, is likely to have been dragged out of proportion by the demise of the Günzburg based company Reifen Ihle, one of the country’s largest and most respected retreaders, who were forced to file for insolvency at the end of February, and who are now being operated under administration.
The company, which employs 230 people in four different businesses including a retread plant and a chain of twelve tyre retail stores, gave several reasons for the insolvency including poor sales throughout the German tyre sector, the mild winter and the loss of a number of key retread customers including the DIY chains Praktiker and Max Bahr. Also important will have been the decision by Continental to switch their retread
Westlake and Aeolus – it means the plethora of cheap new tyres being sold at less than the price of a retread by brokers and wholesalers, often marketing by e-mail (who in the tyre trade does not receive at least half a dozen unsolicited emails ever y day from these companies?). Many market observers are saying that the German market, often somewhat immune from this kind of price competition, has been particularly badly hit over the last year.
Is this true? Yes and no. Latest German statistics from the BRV suggest that there was a fall off in the market a couple of years ago, but 2013 retread sales were marginally up. The fall off was also in line with a general decline in the whole of the new tyre market.
This view was supported by Stefan Mayrhofer, Managing Director of Gummiwerk Kraiburg, during the recent Essen show. His view was that 2011 was a good year, which was followed by a collapse in 2012, since when the market has remained stable at a lower level. Kraiburg has now reorganised itself to account for the new reality. 2014, says Mayrhofer, has remained more or less on the same level and although he does not see a return to the previous higher levels, neither does he see a further collapse. These comments suggest one thing in particular. At the bottom end of
sustainable market for retreads at the quality end of the market – not as a bucket-shop alternative.
In the UK, the retreading market has remained buoyant throughout the last couple of years. Retreaders say they are as busy as they have ever been and, although they concur that there is price pressure from cheap imports, there does not
GY and the Bridgestone-owned Bulldog Remoulds) whose products are marketed as part of a whole life package –or major independents like Bandvulc and Vacu-Lug, who are also taking on a full service portfolio including new Chinese tyres, tyre distribution and service and fleet management services, as well as contract retreading for other
Retreads from the product range of Direct Tyre Sales
22 Commercial Tyre Business