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Published on January 5, 1998

TRUCK TIRE BATTLEGROUND

It may not be the most glamorous part of the industry, but retreading and commercial tire sales could prove to be a hotbed of activity in the year ahead.
A fundamental shift is occurring among tire and retreading suppliers that mimics what has happened among independent dealers and retreaders.

At one time, truck tire retreading and commercial tire sales were considered separate entities. But this distinction has blurred as these operations almost have become synonymous.

Today, many companies that once concentrated on retreading now are active in the commercial tire sales field and vice versa.

This trend of offering both new and retreaded tires is being played out among suppliers looking to capture and hold on to wheel positions at major trucking fleets.

Witness Bandag Inc.'s entry into the commercial tire sales field by purchasing five of its largest franchisees. No longer does Bandag just supply tread rubber and retreading equipment. Now it owns one of the largest commercial and retread tire concerns in the country.

Michelin, meanwhile, has begun offering retread franchises to its dealer customers as a means of providing cradle-to-grave tire service to fleet customers.

This expansion better positions Michelin to compete with Goodyear, which already has one of North America's largest commercial and retreading operations.

For tire dealers and retreaders alike, these moves are changing the playing field, giving a significant advantage to those participating in their suppliers' national account programs.

In the year ahead, look for these suppliers to tie up business from major trucking fleets, effectively reducing the amount of business available to non-affiliated independents.

Thus, many dealers and retreaders will face a tough decision: Should they join their supplier and become part of a larger, national retread/commercial group? Or should they go it alone and risk becoming local or regional niche players?

How these questions are answered may determine their future.

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