Retreading

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TPMS: Chrysler Pacifica – 2022

continues to see “marginal” growth in 2023. But he says, “it will no doubt affect us and the retreading industry as a whole while this environment persists.”

Dorsey Tire Co. Inc., which has outlets in Georgia and South Carolina, received “a tremendous amount of imported tires in the fourth quarter,” says Bruce Chamblee, the company’s chief operating officer.

Yet demand for retreads has remained strong. Chamblee says the “pricing (of the imported tires) is still out of line, as the tires that came in had inflated costs due to agreements made when shipping rates were excessive.”

Michael Beasley, general manager of Beasley Tire Service Inc. in Houston, Texas, says imports definitely affect his retread business.

“With pricing drastically falling on import tires this year, retreads will have an increased pressure above and beyond what was experienced in 2022. With raw material price increases in 2021 through 2022, coupled with increased operational costs, the profitability of (the) retread business will remain tough.”

At Bradenton, Fla.-based Callaghan Tire Inc., CEO Don Mead is still waiting for all the pieces to settle.

“Dramatic increases in import prices created increased demand for retreads in 2021 and 2022. In the last quarter of 2022, we saw import supplies strengthen significantly to the point where they were plentiful.

“As a result, prices for those imports began to materially fall. At this time, we haven’t seen retread demand noticeably fall, but based upon past supply (and) price dynamics, that would certainly be the expectation.”

Mead says so far, demand for retreads has remained strong.

“The strong economy and the previous supply challenges with new truck tires created more opportunities with retreads. Although new truck tire prices have dramatically risen, so has the cost of retreads. Tread rubber prices have risen, driven largely by the same factors affecting new tires.”

He cited two key factors: higher labor costs driven by labor supply issues and higher fuel prices, which have increased transportation costs.

Despite that, Mead says that “the price difference between higher tier new tires and retreads has continued to still make retreads a good value.”

Dorsey Tire Co. Inc., which has outlets in Georgia and South Carolina, received “a tremendous amount of imported tires in the fourth quarter,” says Bruce Chamblee, the company’s chief operating officer.

Larry Faulkner, executive vice president of Atlanta Commercial Tire, located in Clayton County, Ga., says he’s seen another factor driving new interest in retreads. “More and more local govern- ments and municipalities are demanding retreads because of sustainability.”

He says pricing actions by new tiremakers are also helping to steer more customers to retreads.

“The continued escalation in price for new tires from large manufacturers is definitely driving the push for more retreads purchased over the road and on local (pick-up and delivery) equipment for most national accounts.”

The Acquisition Puzzle

Despite worries about the economy in 2022, it turned out to be a year with plenty of acquisition action. And that included retreading operations.

Several deals had one company in common. Bridgestone Americas Inc. sold 51 GCR stores and nine retread plants throughout California, Colorado, Oregon, Utah and Washington.

The bulk of those properties were bought by two of the nation’s largest commercial dealers and retreaders: Columbia, Miss.-based Southern Tire Mart, which purchased 26 GCR stores and four retread plants, and Green Bay, Wis.-based Pomp’s Tire Service Inc., which bought 24 stores and four retread operations.

Commercial Tire Inc., which is based in Meridian, Idaho, bought one GCR store and one retread plant.

The deals closed the books on the longstanding GCR-brand in the U.S.