Some of the country’s largest retreaders are forecasting that demand for their products will be “flat” or “steady” in 2024.
“We are forecasting a fairly flat year for 2024, with a small increase at some of our newer stores,” says Jon Langerak, president and CEO of Byron Center, Mich.-based Wonderland Tire Co.
Bob Feldbauer, president and CEO of Logan, Utah-based Jack’s Tire & Oil Management Co., agrees that 2024 will be a “slower year.”
“We are expecting a 20% decrease in market demand for 2024,” says Daniel Horn, vice president of sales for McCarthy Tire Service Co. Inc., which is headquartered in Wilkes-Barre, Pa.
Pete Glesing, president of commercial sales and operations at Best-One Tire, which is based in Monroe, Ind., agrees that there will be a decline in demand, but only expects that decline to be present during the first two quarters of 2024.
The decrease in demand for retreaded tires can be attributed to “the market softening (and) freight demand slowing,” according to Bruce Chamblee, chief operating officer at Dorsey Tire Co., which has locations in Georgia and South Carolina.
Chamblee expects to see a “steep decline” in demand versus 2023 levels.
Another factor for the expected decline in demand is the fact that 2024 is an election year, according to Noah Hickman, president of Oak Hill, Ohio-based H&H Industries Inc., which specializes in retreading OTR tires.
“It will be harder to forecast the market with the uncertainty of the election,” he says.
Not all retreaders are projecting that demand will decrease in 2024. Some tire dealers are expecting a rise in demand.
“We are planning for a year of growth in the retread market between 5% to 10%,” says Jeremy Benton, vice president of commercial division and manufacturing at Black's Tire Service Inc.’s Carolina Retread division.
Bob Berlin, president at Pete’s Tire Barns Inc., which is headquartered in Orange, Mass., says he expects growth in retreaded tire demand at his dealership to be up 2% to 3%.
Over at Conlan Tire LLC in Mulberry, Fla., demand should increase 15% to 20%, according to Steve Bobovnik, Conlan Tire’s director of corporate operations.
Continental Tire the Americas LLC also expecting to see growth in its retread business, according to Shaun Uys, head of Continental U.S. market truck tires, replacement.
“We expect a moderate increase in demand for retreads in 2024 based on conditions and forecasts within the industry, and will continue to expand our capabilities and network to meet whatever demand we may experience,” says Steve Phillips, director of tire sales and plant operation retread for Love’s Travel Stops.
The majority of retreaders who recently talked with MTD say their retreading production was down or flat in 2023. However, some saw growth.
Bobovnik says that retread production at his company was up 30%. “Customers wanted to stock less new tire inventory because of excessive stock inventory in their warehouses from the previous year.”
Langerak says that Wonderland Tire’s orders increased during 2023.
And supply chain issues caused Dorsey Tire to experience more demand from customers.
“It was also affected by the conversion programs on large fleet customers, who shifted away from bias tires,” says Chamblee.
Horn says McCarthy Tire’s retread production was up 20% last year.
Tariff watch
Retreaders also report they are keeping an eye on tariff developments.
The U.S. Department of Commerce is in the process of determining whether tariffs should be levied on medium truck tires made in Thailand. A preliminary ruling is expected in May.
Retreaders who recently talked with MTD appeared to be split on whether tariffs will impact their businesses.
“I expect the tariffs to help show the extended value of retreading quality casings,” says Benton. “Along with this, we forecast that casing pricing will continue to increase and it will have an effect on casing supply.”
Berlin says tariffs should “positively help retreading” because retreads will be positioned as “a better, cost-effective option” for fleets.
Some retreaders believe tariffs will not impact their business.
“Importers will shift production away from tariff countries as they have done in the past,” explains Chamblee. “What we expect to see is new countries enter the import medium truck category as an alternative to Thailand-made truck tires.”
Horn and Feldbauer say they expect little to no impact.
Gary Van Blaricom, president of Heartland Tire Group, which is based in Davenport, Iowa, agrees that factories will move to other locations so there will be little change.
“It depends on the level of any tariff,” says Love’s Phillips.
“As a significant number of TBR tires are produced in Thailand, imposition of high tariffs could pivot more volume to retreads, and it also could create short- or intermediate-term availability issues with new tires, as new tire manufacturers adjust to changing conditions in the market.
In any event, retreads can and will continue to offer a valuable economic component for any commercial fleet’s maintenance program.”
Ongoing challenges
When asked about the biggest challenges facing retreaders, a common theme stood out: staffing issues.
“The biggest challenge for 2024 is a reliable and consistent labor force,” says Bobovnik.
Benton says finding “good, quality team members” is a top priority at Black’s Tire.
Keeping plants full will be another challenge.
“Managing our current retread demand carryover from year-end and slower production numbers will be a big challenge,” says Feldbauer.
Berlin agrees that managing demand fluctuations will be a challenge, but notes that his company continues to invest in equipment. Pete’s Tire Barns recently installed three Bandag tread splice builders to “help ensure a more uniform quality and a matched tread splice.”
“In 2024, the industry is operating in a challenging environment where we have incurred significant increases in material and labor inputs over the past several years, just like the customers we serve,” says Phillips.
“Value and quality are important components to retread producers and our customers and we will continue to expand our capabilities to produce high quality retreads and focus on opportunities to meet the commercial product and service needs of our customers.”
