The tire industry depends, in large part, on the automobile market, which has “morphed from meltdown three years ago to a safe haven” today. US auto sales grew 10% to 12.78 million vehicles in 2011, with the three US automakers taking market share in the US for the first time in 23 years. Auto sales are expected to grow 4-9% in 2012. (“Tire Manufacturing Information,” www.hoovers.com; “Tire Manufacturing in the US,” www.ibisworld.com; “US Auto Market Now Industry Bedrock,” ca.reuters.com, 1/9/12; “Analysts Expect Modest Gains in US Auto Sales in 2012,” www.autonews.com, 1/8/12)
Related, in part, to the surge in auto sales—spurred by incentive programs and low interest rates—US consumer tire dealers report that their sales, which were down dramatically in 2009, surged in 2010 and 2011, as pent up demand and tire shortages caused by an upturn in truck freight ton miles resulted in increased spending on tires. In addition, tire pricing rose significantly in 2011, with the replacement tire market (generally the industry’s largest product segment) totaling $37.3 billion, a 19.5% increase over 2010. Those consumers still wary of the shaky economy tend to hold on to their cars longer, necessitating replacement tires and maintenance, so this upward trend is expected to continue for the next five years. (“A Tire Explosion,” www.moderntiredealer.com; “Tire Manufacturing in the US,” www.ibisworld.com; “Our Industry is Worth—Drum Roll, Please—More than $38 Billion!,” www.moderntiredealer.com, 1/9/12)
In part as a result of the new tire shortage, consumers keeping their cars longer, and the high price of replacement tires, retreads for cars, SUVs, vans and small trucks have seen a recent resurgence. Retreads, in which worn tread is buffed away and replaced with a new tread bonded to the tire body in a process similar to the manufacture of a new tire, has grown slowly but steadily, with approximately 850 retread plants operating in North America. Retreads represent over $3 billion in tires sold annually and sell for about 30-50% of the price of a new tire; experts estimate that retreads save trucking fleet owners nearly $3 billion per year over replacement tires.
Retreads are produced according to stringent industry practices, and most North America plants are franchised, licensed, or otherwise affiliated with major brand suppliers who provide technical assistance to ensure a reliable product is produced. In addition, passenger, light pick up, and 4×4 tires are retreaded according to standards set by the US Department of Transportation, and they carry a code number on the sidewall indicating where and when the tire was retreaded. Due to the use of computers and other new technology in retreading, retread tires have consistently demonstrated the same safety and reliability as new tires, and there are currently as many retreaded tires in operation as there are original tread life tires.
In addition, retreading is seen as “green,” as it conserves more than 400 million gallons of oil in North America each year (it takes 22 gallons of oil to manufacture one new truck tire and 7 to produce a retread). Retreading also helps divert thousands of scrap tires away from disposal. (“Passenger Retreads a Thing of the Past? Don’t Bet on It,” www.yourarticlesource.com, 4/26/11; “About Retreading,” www.retread.org; “Retread Myths,” www.retread.org; “Retread Tires,” www.epa.gov; “Retreaded Tire Use and Safety: Synthesis,” Washington State Department of Transportation, 9/3/09)
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