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April 29, 1996 02:00 AM

ITRA SEES LITTLE GROWTH IN RETREAD PRODUCTION

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    LOUISVILLE, Ky.-Passenger tire retreading is expected to continue its downward spiral over the next 18 months, according to the Tire Retreading/Repair Journal, published by the International Tire & Rubber Association (formerly the American Retreaders Association). In his annual ``Retreadonomics'' report, which appeared in the publication's April issue, ITRA Executive Director Marvin Bozarth said 4.90 million passenger retreads likely will be produced this year-down from 5.0 million in 1995-dropping again in 1997 to 4.50 million units.

    Mr. Bozarth said the downturn in passenger tire units during 1995 was partially due to weather conditions and a shortage of retreadable casings.

    Although demand for high-performance retreads continues to increase, the high cost of collecting and transporting such casings remains a factor limiting their production, he said.

    Passenger car sizes accounted for most of the decline in total retread units, from 30 million in 1994 to 29.1 million in 1995.

    Production of off-the-road retreads increased slightly in 1995, while that of light truck, commercial truck and specialty retreads changed little in terms of units from the previous year.

    The number of light truck retreads is forecast to remain at its present 7.2 million level through 1997, while that of medium truck retreads is expected to increase from 16 million this year to 16.3 million units in 1997.

    Mr. Bozarth said there is a high demand for retreaded light truck tires. However, many retreaders ``don't want to be bothered with them'' because they believe the labor costs are very close to that of retreading medium truck tires.

    Total production of large off-the-road and aircraft retreads is expected to slip this year to 670,000 units from 678,000 units in 1995. However, they are forecast to grow to 675,000 units next year.

    Of the nation's 1,381 retreading plants, 1,265 produce medium truck tire retreads. Precure retreading accounts for 75 percent of overall production, according to Mr. Bozarth.

    While raw material costs appear to have leveled off after increasing dramatically in late 1994 and early 1995, other production ex-penses-such as labor, overhead and distribution-are increasing, Mr. Bozarth said.

    He advised retreaders to maintain accurate cost records and maximize the efficiency of their operations in order to compete with new tires.

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