Equipment

Are Retreaded Tires Gaining Market Share over Replacements?

February 2014, TruckingInfo.com - WebXclusive

by Jim Park, Equipment Editor - Also by this author

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"There is a very wide variety of products in the replacement market, which range in size, wheel position, application type, tier and quality," Crehan says. "These variations all affect the 'average' cost of a replacement tire. For the fleet, a replacement tire must provide value, and this value is achieved by making the most appropriate selection for the vehicle, whether that selection is a new tire replacement or a retread."

Appreciating Assets

Regrettably, tires seldom become more valuable over time. But fleets should learn to appreciate the value of their tire and casing assets. They  represent a significant part of the lifetime cost equation.

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MTD pegged the value of a casing in 2013 at $78.61. That, of course, is the average price retreaders were paying for casings last year, not the value of the casings you carry on the books. A casing can be worth two or three times that to fleets, depending on how many times the tire is retreaded.

A premium casing will retread more times than a cheap one, thus extending the payback and lowering the lifetime cost per mile. But there are instances where retreading may not be cost-effective. It's really a call each fleet has to make, says Crehan.

"A fleet must determine its casing inventory and quality to determine what part of its replacement program will be in the retread area," he notes.

Lower cost remains a significant advantage of retreading and a good part of the reason retreads have been popular for many years. The retread processes and products have significantly advanced during the last 20-25 years and deliver measurable value to fleet customers. Even if the price gap is narrowing, they still represent a significant savings over new replacement tires.

"There are many different types and quality of retreads now available," says Crehan. "Fleets that choose to retread can save themselves significant amounts of money with a well managed program and good retreaders on the team."

Michelin also provided us with some data from the Rubber Manufacturers Association, showing some slightly different numbers than MTD presented. Michelin says the recent RMA information it has shows the number of replacement tires shipped in 2013 was down 1.9% from 16.3 million in 2012 to 15.85 million last year. The number of retreads produced in 2013 was down 0.3% from 14.8 million in 2012 to 14.4 million. "There does not seem to be a measurable market share gain in the retread market," Crehan pointed out.


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Comments

  1. 1. Ben Kipp [ February 13, 2014 @ 03:55PM ]

    Very good article, basic, to the point, not bogged down with technical info, but specific enough to cover the issue at hand. Anybody in the commercial tire industry should read this. Very well written.

 

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