Market Trends of Tire Retreading Industry
Overall positive outlook toward Retreading
- The concept of retreading tires has always been among heavy commercial vehicles, but with time the potential benefits of using it for light commercial vehicles have been noticed. In a light-duty vehicle, single tire manufacturing consumes, on average, 26 liters of oil. However, retreading of the same tire consumes only 9 liters of oil which is almost 34% of the new manufacturing process.
- In addition, growing Commercial fleet operators focus on ensuring a full return on investment in their vehicles and availability of utilizing options such as tire retreading as they look to consolidate their costs further, expected to create a positive outlook for the market.
- Several government bodies have also been exploring new market technologies to cater to the growing demand from the auto industry and its ever-increasing need for reliable tires.
- For instance, in March 2022, Malaysia Rubber Council unveiled the aim to penetrate new markets in countries such as India, Africa, Latin America, the United States, and Europe. The great demand in these countries is largely driven by the need for retreading materials and rubber automotive components promoted in these countries with an exceptional market for the automotive industry.
- Tire manufacturers have also expressed keen interest in exploring new opportunities and market demand for retreading the tires, owing to the increased inclination toward this technology. Major tire manufacturers have also begun research into this technology with a vision to cater to this market.
- For instance, in Sep 2021, Bridgestone Corporation announced that it would present its new commercial vehicle portfolio with the latest mobility and tire retreading concepts. As per the announcement, the company expects that the Bridgestone Duravis R002 premium tire, which is retreaded, is characterized by excellent wet grip, optimal fuel efficiency, and robust carcass.
- Bridgestone Corporation also announced the acquisition of REIFF for the expansion of its retail network. REIFF runs a leading network of 42 retail stores in Germany, with a tire retreading plant which was part of the acquisition deal, that is expected to further increase Bridgestone's foothold over the retreading market
- Several players in the market are offering discounts, price-effective policies, product launches, etc., likely to support the growth of the market during the forecast period. For instance,
- In July 2021, Continental Tires launched the 'Conti Bharosa' warranty program, which offers a 5-year warranty policy for truck and bus tires. The company says that the said program also covers the first retread for normal load applications.
- The Conti Bharosa program by Continental Tires offers warranty coverage against any manufacturing defects for a period of five years against the coverage of two to three years that has been provided by the tire manufacturers in India traditionally. Moreover, Conti Bharosa also covers the second life of tires by warranting against any manufacturing defects after the first retread for tires used in normal load applications.
- In October 2021, Goodyear Tire & Rubber Company announced the launch of its RT-3B bead-to-bead retread. The new retread provides all-around performance on an array of underfoot conditions for loaders and graders and complements its existing lineup of premium off-the-road (OTR) retread tires. The Goodyear RT-3B retread is now available in the U.S. and Canada in two popular sizes: 20.5R25 and 23.5R25.
- Moreover, tire retreading for various medium-duty vehicles has been growing at a rapid pace as several last-mile delivery fleet service providers, logistic companies, etc., are deploying these tires across the fleet. For instance, The larger parcel-delivery fleets, such as UPS and FedEx, already leverage retreads for their last-mile delivery business, Goodyear agreed that as the medium-duty trucking segment continues to grow, so does their investment in retreads as a cost-saving approach.
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Asia-Pacific Continues to be the Largest Market
- China is one of the largest industries in terms of automobiles across the globe. The country has the largest fleet of passenger cars contributing to the growth of tire retreading in the country. The country has the highest production rate of passenger cars and commercial vehicles. The production is growing significantly over the past few years, which will fuel the demand for tire retreading in the future. For instance, China has witnessed overall production (passenger cars and commercial vehicles) of 27.02 million units, an annual growth of 3% in 2022.
- The automotive tire market is being driven by factors such as the fast expansion of the automotive industry and the overall economy, particularly in China, India, and Japan. Growing construction activities, rapid industrial growth, and a surge in demand for fuel-efficient technology may all be attributed to the region's increased automobile tire market needs.
- Furthermore, the automobile tire market is boosted by various raw material suppliers and favorable government guidelines. Because agricultural vehicles are so important in countries like Japan, China, and South Korea, demand for automotive tires for agricultural vehicles is likely to be significant.
- India is one of the renowned names in the automobile industry, with strong automobile manufacturers serving Indian products across the world. The country's passenger car market is growing significantly; the country witnessed a dip in 2020; however, the market is revived and is expected to rise in the future. India is one of the largest automotive and tire markets in the world, where high-quality tire retreading is gaining popularity among commercial vehicles such as trucks. Such factors are driving the tire retreading market in the country.
- Various companies are partnering and acquiring to maintain a better position and reach in the market. For instance, in December 2021, the Italian tire company Marangoni Group entered a Memorandum of Understanding to acquire the shares held by GRP Ltd in the Indian Joint Venture company Marangoni GRP Pvt Ltd. Such an acquisition will make the position of the company stronger in the country, which will further enhance the tire retreading market in India.
- In June 2021, the Japanese tire company Bridgestone Corporation plans to invest 700 billion yen in strategic resources by 2023. The focus is to expand the retreading activities at other segments apart from commercial vehicle and OTR tire retreading.
- All the above-mentioned factors, along with the new opening of manufacturing facilities for tire retreading, are expected to enhance the market of tire retreading in the forecast period.
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