AKRON—It's no secret that passenger tire retreading is in decline in the United States—and has been for quite some time. But recent trends raise the question of whether this segment of the retread industry is destined for extinction. Once the mainstay of the industry, passenger tire retreading has declined from a peak of 40 million units produced in 1970 to a scant 2.6 million units last year, and the International Tire and Rubber Association (ITRA) forecasts that figure will drop to below 2 million units this year.
The reasons for this decline are no secret, either. Initially, a major factor was the changeover from bias-ply to radial tires. Successful radial retreading required more precise processing with greater attention to detail, as well as equipment upgrades. Retreaders who couldn't or wouldn't make the necessary adjustments eventually fell by the wayside.
Those passenger retreaders who successfully made the transition to radial processing faced a more intractable problem, one that may yet prove insurmountable: low-cost, entry-level new tires, especially imports.
Retreads traditionally have been marketed as a low-cost alternative to new tires. If the difference between the price of a retread and that of a comparable new tire becomes too narrow, consumers opt for the new tire.
``Price is everything,'' said retread advocate Harvey Brodsky, managing director of the Tire Retread Information Bureau, ``but the low price of new tires is unbelievable. Dealers are offering loss-leader (new) tires for next to nothing.''
Art Kluttz, president and owner of Retread Manufacturing & Tire Sales Inc. in Locust, N.C., said his 235/75R15 retread, priced at $20.95 for cap and casing, was up against cheap new tires of the same size selling for $25. ``It's just not enough difference in price,'' he said.
Passenger tire retreaders also have been squeezed by the growth in sales of used tires, which offer another low-cost alternative to new tires—one that can undercut retreads.
``Used tire people flooded the market,'' said Larry Davis, whose company, C&J Tire Service Inc. in Chadbourn, N.C., stopped retreading passenger tires in August 1998.
Someone looking for the cheapest rubber he can find may opt for used tires, said Marvin Bozarth, executive director of ITRA.
The used tire market also diverts some of the better casings away from retreading, and the availability of quality passenger tire casings is another problem, according to some retreaders.
Mr. Bozarth estimated that only 10-15 percent of passenger tires coming off vehicles are suitable for retreading; the remainder are scrap.
Many of the low-cost passenger tires have poor-quality casings to begin with, Mr. Kluttz said. These casings have very little undertread: ``There's nothing between the tread and the cords,'' he said.
Mr. Kluttz said his company kept careful tabs on the retreads returned for adjustment. Only about one in eight adjustments was due to a retread-related problem, he said; the rest stemmed from a problem with the original casing.
Rising costs for materials and equipment also have cut into passenger retreaders' profits, Mr. Kluttz said. He reported a 30-percent increase in the cost of tread rubber over the past five years. The cost of air bags doubled in the same period, he said, while items such as buffing blades also rose significantly.
The combination of declining demand, rising costs and the inability to raise prices finally proved too much for Mr. Kluttz. Faced with a need to upgrade some critical equipment, he decided instead to pull the plug on his passenger retreading operation in April, reopening his business in mid-May as a retail tire dealership under the name Locust Tire & Car Care. ``We decided to quit while we were ahead,'' he said.
His decision was not unique. Long-time passenger retreader Ray Carr Tires Inc. in Harrisonburg, Va., ceased that operation in January, deciding to focus its resources on other areas of its business, including truck tire retreading.
Even Les Schwab Tire Centers, long a leader in passenger retreading, has seen its production shrink markedly over the past couple of years, tumbling nearly 60 percent to fewer than 500 units per day, most of them winter tires.
Most of the remaining passenger tire retreaders are focusing on niche markets, such as winter tires or high-performance radials, where higher new-tire costs provide a better price differential.
Still, said Mr. Bozarth, ``it takes a special type of person to keep up with the technology to compete with new tires in looks and appearance.'' It's not easy to do, he said, given the constant proliferation of sizes and tread designs.
It's not that passenger tire retreading can't be profitable, Mr. Bozarth said. ``But the same effort and personnel can be more profitably applied to other segments of retreading.''
Whether there's a long-term future for passenger retreading remains an open question. But, said Mr. Brodsky, ``if Ray Carr and Les Schwab can't make it work, I think you have your answer.''