Nevertheless, Carver said they’re seeing a significant slowing in North American retread sales. One reason is lower demand for new trucks has pushed more new tires into the replacement market. Also, there’s an influx of low-priced new tires from overseas which are competing for wheel positions in low-margin markets. “Given the softer demand, we anticipate that it will be more difficult to recover future increases in raw materials costs through further price increases.”
Overall, second quarter tread volume was down 7% globally. Sales in North America, Europe and Asia were down from 1999 while sales in Latin America -- despite improvements in Mexico and Brazil, were flat.
Bandag’s distribution subsidiary, Tire Distribution Systems, posted an 8% increase in second quarter sales revenues with a same-store increase of 2%. Carver said the company’s tire management outsourcing subsidiary, Tire Management Solutions, “is continuing to make progress with the initial tire management client and is well into negotiations with additional customers.”