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The Tire Retreading Market is projected to grow with a CAGR of more than 5 % during the forecast period.
- Owing to the growing demand for passenger cars and commercial vehicles, increase in average life of the vehicles due to the developments in engineering and technology which has increased the quality of products and spare parts and enhanced the overall life of the vehicles the market for retreaded tires is growing with high rate.
- Retreaded tire is environment friendly as it saves crude oil which is required to produce a new tire by more than 50%. It also is beneficial for the user as it costs 40% less than a new tire.
- Many big players in tire manufacturing industry are also joining the retreaded tire business as they see a huge potential in the market.
- However, the stringent government norms for retreaded tires ensure quality remanufacturing that provides tires with good operational life and services.
Key Market Trends
Commercial Vehicles Segment Captures Largest Market Share
Commercial vehicle segment captures the largest market share for tire retreading market. The demand is fueled by the commercial vehicles sales globally which increased with a rate of around 4% during the last 5 years. The demand is rising due to the increase in industrial and logistics activities around the world.
The truck fleet operators are adopting retreaded tires because of the financial benefit it provides them. More than 70% of commercial trucking fleets retread their tires at least one time. As a retread is approximately 1/3 to 1/2 the cost of a new tire, it is a very good option for the fleet operator to save cost. Following a good tire maintenance program, worn tires can be retreaded up to four or five times but normally end users are retreading a tire at least twice.
Many big players in the Tire industry are setting up centers globally to provide retreaded tires. For instance, in March 2019, JK Tyres which is a major player in tire manufacturing industry, set up its 34th retread center in India with an aim to reach 100 centers by the end of 2020. The center is strategically located on the NH-17 highway connecting the Mumbai-Nasik Highway and will serve as an important transit point for vehicles going to cities like Pune, Mumbai and Surat.
Asia-Pacific Continues to be the Largest Market
The region has major developing economies in the world China and India, where the income level of the people is rising which is allowing people to purchase cars and due to the growing industrial and logistics activities in the region the sales of commercial vehicles are also on a rise.
The growing e-commerce sector in the region is also boosting the commercial vehicles demand. The government in the region is also encouraging vehicle owners to use retreaded tires by providing lower tax bracket for the product.
For instance, in December 2018, the GST council of India, slashed the rate on retread tires to 18 percent from 28 percent with an aim to boost the market demand in the region. the tax bracket for new tires remains at 28%.
The Tire manufacturers in the region are establishing new units for tire retreading in the region to cater the growing demand. For instance, in June 2019, JK tires, inaugurated the first JK Retread Centre in Pokhara, Nepal. This is JK Tyre’s first Retread Centre in Nepal.
The Tire Retreading Market is fragmented, with many players accounting for a small market share. Some of the prominent companies in the Tire Retreading Market are Bridgestone corp, valley tire, Treadwirght, Goodyear and others. The major players in the country are entering into different geographies to capture considerable market share.
For instance, in October 2019, Kal Tire opened retreading and repair facility in Mexico. The location is strategically located as 30% of Mexico’s mines are in the state of Sonora. This marks the sixth OTR retreading and repair facility for Kal Tire, with the other facilities located in Canada, the UK, West Africa and Chile.
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