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CHINESE TYRES
national associations who have made comments or representations on behalf of the retreading industry, are successful in persuading the European government to do something that will help protect the European new tyre and retreading industries
as can be seen by the difficulties experienced by Reifen Ihle once they lost their contract with Continental, and the current well documented difficulties at Marangoni’s retread plant in Rovereto, Italy.
In general, those retreaders who
independent retreaders, which has focused its business on developing a full fleet management package including its own tyre servicing outlets. A couple of years ago Bandvulc was importing and marketing Boto new tyres from China alongside its own premium quality retreads. However, according to Bandvulc’s Managing Director Patrick O’Connell, the company eventually realised that selling any Chinese tyres was directly against their interest as a retreader, so they stopped the practice. Retreaders who double up as tyre distributors may wish to consider whether they see themselves as retreaders first or tyre distributors. If they see themselves primarily as retreaders then the question needs to be asked whether chasing a few extra sales by stocking Chinese tyres is beneficial.
It is often said that retreading runs into trouble when the differential in price between the cheapest new tyres and retreads becomes too narrow. It is clear that many end users simply see things in pure price terms. However, it strikes me that the future of retreading in the light of the challenge from budget new tyres will not come down to price alone. It will come down to service and communication. Historically the retreading industry has been disastrously bad in promoting itself properly and in identifying and keeping customers. I remember several years ago carrying out a market research project on behalf of a major retreading company during which I identified a large number
of truck fleets and interviewed them about whether they used retreads and whether they would consider using them. A surprisingly high proportion of the fleets I visited said they would be happy to consider using retreads if only they had been visited by retreaders to promote their products.
With that in mind, I suspect that in the future the ability of independent retreaders to survive and flourish in the increasingly competitive tyre market will come down to:
• The ability to justify and explain pricing and the ability to measure and explain cost per mile • The ability to identify potential new fleet customers, the ability to communicate direct with them and service them properly
• The ability to add value added services such as fleet management programmes
• The ability to spot and develop application specific niches where the competition from cheap imports is less severe or where the cost/performance ratio is more beneficial to retreads Overall, the challenge from cheap Chinese tyres is not going to go away. It may abate for a while depending on exchange rates, raw material costs, tariff levels etc, but ultimately it will come back, so it is up to the European retreading industry to accept that retreading in Europe is entering a new age, and prepare itself accordingly.
Call it rationalisation, streamlining or any other name you like, the closures of retreading operations by the leading manufacturers and the centralising of retreading is a sign of just how serious the issue of Chinese tyre dumping is. Even having centralized retreading, Pneu Laurent is still operating well below capacity.
from unfair competition. However, many foresee a further consolidation in the European retreading industry and a new restructuring of the market. If
that happens, what kind of a retreading industry can we expect to see in Europe, and what can individual retreaders do to make sure they are the ones who survive the shake out?
At first sight it appears that mould cure retreading has performed better than pre-cure in recent years. Of course, the mould cure/pre-cure split varies significantly in different parts of Europe, and for different reasons, but according to ETRMA since 2012 mould cure has increased from 49.6% to 51.3% of the total market. However, there is more to this than meets the eye, and this does not necessarily mean that mould cure retreaders are always better equipped to survive than their pre-cure counterparts.
To begin with, many of the continent’s largest mould cure retread plants are under the direct ownership of the new tyre manufacturers, for whom retreading and the opportunity to lengthen the life and therefore cost per km of their products is at the forefront of their strategy to prove that their own premium products provide better value for money than cheaper mid-range and budget products.
Similarly, operating a large, independent mould cure retread plant is no guarantee of success,
are able to market their products as part of an overall fleet tyre management concept and full life package and those who have direct access to their fleet customers are best equipped to survive. Those who have to sell through distributors and those whose products are in direct competition to cheap Chinese tyres are the companies who face the bigger challenge. Retreaders who are already tyre distributors have been shown to be more likely to be successful, not only because their profit margins are bigger, but because they are able to have a direct influence over the end user.
The pages of this magazine are full of stories of
retreaders from around
the world who have
adopted an “if-you- can’t-beat-them–join- them” approach and have started selling Chinese tyres alongside their retread products, but there is some evidence to suggest that unless the retreader is marketing one of the top Chinese brands like Double Coin or Sailun, this is more likely to be counter-productive. One retreader than has done a u-turn on this is the UK retreader Bandvulc, one of the most successful
22 Retreading Business