AKRON-Retreaders entered the year on a positive note after capping off a prosperous 1993, a TIRE BUSINESS survey shows. A majority of the 76 retreaders responding to the year-end survey anticipate continued growth in sales after experiencing an average 14-percent increase in sales last year. Although, as in past years, commercial tire retreaders fared better than passenger retreaders.
Passenger retreads are expected to continue losing market share as light truck and commercial truck retreads enjoy additional sales growth.
Of the retreaders surveyed, nearly two in three (65.0 percent) experienced increased sales compared with the previous year, with most expecting another increase in 1994-generally in the double-digit percentage range.
One of the notable achievers was Kyger Truck Tire Center in Cedar Rapids, Iowa. The Oliver retreader has operated for two years in what owner Robert Whitinger describes as ``Bandag territory''-about 40 miles from Bandag Inc.'s Muscatine, Iowa, headquarters.
By providing trucking firms with an alternative brand of retread, Mr. Whitinger said, the young firm was able to boost its sales 40 percent and triple its commercial retread production last year, necessitating additional equipment and shop personnel.
Mr. Whitinger expects his dealership to increase revenues another 30 percent this year.
Among the survery respondents that reported a sales decrease last year was Linstrom Tire Sales Inc. in Denver. The 53-year-old passenger and truck tire retreading firm experienced a 25-percent drop in sales last year that it attributed to a depressed local economy.
In addition, the firm's operating costs jumped 15 percent last year, mostly due to rising material prices. ``Prices increase on rubber, but the public doesn't expect the price (to) change on tires or service,'' company Treasurer Virginia Linstrom said.
Her complaint was echoed by many retreaders. Although operating costs climbed an average 7 percent for more than half the survey respondents, most said they expect retread prices to remain at current levels.
Retreaders said efforts to raise their margins are often hampered by competitive pressures, such as price cutting among retreaders and new-tire dealers, direct selling by manufacturers and a growing number of competitors in the marketplace.
During 1993, about 70 percent of the respondents experienced a noticeable increase in price competition in their respective markets.
But increased competition didn't seem to adversely affect the sales of most retreaders surveyed. According to their responses:
About 72.7 percent of the commercial retreaders responding enjoyed improved sales in 1993, while sales for another 16.7 percent remained at the same level as the previous year;
About 48 percent of the passenger retreaders surveyed claimed their sales had fallen, while another 33 percent experienced steady sales;
Of the light truck tire retreaders, about 48 percent boosted sales in 1993, while 38.9 percent said their sales mirrored those of 1992;
Six of the 13 OTR retreaders responding improved their sales, while five maintained their output last year; and
Of 12 specialty tire retreaders surveyed, seven stayed about even with the previous year, while three boosted their revenues.
Some 28 percent of the entire survey group said they're planning such changes this year as expanding existing plants, increasing production or opening new facilities.