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Published on February 1, 1999

CAR-TIRE RETREADS KEEP DECLINING

The passenger tire retread segment of the tire business, which has been declining steadily for the past two decades, has received two huge blows in the past three months. North America's second- and third-largest producers—EcoTyre Technologies Inc., which went out of business, and Ray Carr Tires, which continues as a successful truck tire retreader—have quit making passenger sizes, calling into question whether passenger tire retreading has any future in North America.

Ray Carr in particular has been a strong advocate for passenger retreads, and his decision to leave that market casts a pall over the business.

It was only a few years ago that Mr. Carr had big plans to expand his passenger retread operations following the acquisition of production equipment of the former Lakin General Corp. Not that long ago, Lakin was the nation's largest supplier of passenger retreads, selling its Achievor-brand product through the Sears, Roebuck and Co. catalog.

As Harvey Brodsky of the Tire Retread Information Bureau put it: ``If Raymond couldn't do it, nobody could do it.'' Mr. Carr, he added, ran a lean operation and at one time produced more passenger retreads than anybody in the U.S.

Two big reasons for passenger retreading's decline have to do with the increasing sales of used car tires and the flood of low-cost radials from overseas which has been driving down domestic prices in general. Inconsistent quality also may be a factor.

Compounding the situation has been the popularity of the all-season radial which negated the need for winter tires in many areas of the county. Winter designs traditionally were a strong market for passenger retreads.

Today, many younger people don't even know what a retread is, and many tire dealers simply don't sell passenger versions. In some markets, it's nearly impossible to locate any.

From a high of more than 30 million units, annual production of passenger retreads fell to less than 3 million in 1998. This year that number—prior to Mr. Carr's announcement—was expected to fall to 2.5 million units. Fewer than 175 shops still produce them in North America, according to the International Tire and Rubber Association.

In contrast, the number of medium truck tires retreaded continues to grow each year and is expected to reach 18 million units in 1999, a 2.9 percent increase from 1998.

The difference is dollars and cents. The average price of a new medium truck tire is about $250 with a retread costing an average of $98.

Typical savings on a car retread ranges from about $4-$15, depending on size, providing little incentive for consumers to settle for a pre-used product.

Regardless of the quality, until the price difference between a new tire and a passenger tire retread grows large enough, the future of passenger tire retreading will remain precarious.

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