HILTON HEAD, S.C.—Michelin Retread Technologies Inc. wants to double its share of the U.S. commercial tire retread market by 2002 and is expanding coverage of the MRTI program to Canada and Mexico. MRTI, a subsidiary of Michelin North America Inc., wants to increase its share of the retread market from a current 10.2 percent level (as of Oct. 11) to 24.6 percent by 2002, officials for Michelin Americas Truck Tires told dealers Oct. 9 in Hilton Head.
The company's objectives include reaching market share levels of 11.6 percent by the end of 1999, 16.3 percent in 2000 and 20.2 percent in 2001. MRTI's current market share estimate is based on the assumption that all of its installed retread shops are operating at 90 percent capacity for that particular day, said John Rice, MATT's chief operating officer.
Roger Handren, MATT's director of retread sales development, said MRTI will launch franchises in Mexico in 2001 and currently is installing franchises in Canada, but the company declined to disclose its plans for those countries.
He said MRTI is ahead of its business plan for 1999 due to ``overwhelming'' demand for MRTI products and applauded dealers for aligning with the firm.
``You are the best of the best,'' Mr. Handren said. ``By becoming an MRTI dealer, you've taken a giant step up and above the competition.''
The Hilton Head meeting, attended by representatives of 85 dealerships, was the first gathering of MRTI franchisees since the company launched retread franchises in 1997. The guest list comprised both MRTI franchisees and dealers of new Michelin truck tires, including at least 20 prominent Bandag Inc. franchisees.
Other issues MRTI discussed included its commitment to supplying durable casings to fleets, expanding the range of types and sizes of its Pre-Mold treads, and expanding its new tread rubber plant in Covington, Ga.
Mr. Rice noted the firm will have 130 individual Pre-Mold precured tread products available by year-end 1999, a range that covers approximately 91 percent of the market. By 2001, MRTI expects to attain about 93-percent market coverage with 160 Pre-Mold offerings.
The company also is offering the following sizes in its Custom-Mold mold cure treads: 275/80R22.5, 275/80R24.5, 11R22.5 and 11R24.5.
Regarding the Covington plant, Mr. Rice called the 92,000-sq.-ft. facility a ``state-of-the-art'' tread-pressing plant that will supply more than 10 percent of the precure retread market once it's fully operational. Michelin invested more than $15 million to build the plant, which initially will employ 76 hourly and 13 salaried workers.
The unit sits on 37 acres and is scheduled to begin production in November. It contains a 16-platen curing press that simultaneously presses 16 tread rolls—enough to make tread for 48 tires, according to MRTI.
Covington's capacity will be in addition to Pre-Mold treads Oliver Rubber Co. presently makes for Michelin.
Although MRTI's program is moving ahead, Mr. Rice told dealers ``there is always some level of resistance from the competition,'' referring to the recent lawsuit filed against Michelin by Bandag Inc., which alleges that Michelin has used illegal tactics in attempting to destroy Bandag's business.
He reiterated that the suit "has no merit," and Bandag is using litigation because it's having difficulty competing with MRTI.
``This lawsuit will not impede Michelin's moves or plans for retreading,'' Mr. Rice said.
MRTI now has 30 operational retread facilities in 20 states, many of which formerly were Bandag shops.