Chinese Retreading Volumes to Grow 30% This Year – CRI
One reason for the low retreading level in China, says CRI, is widespread misperceptions about the retreading industry and the products they supply. Common false assumptions are that retreads deliver lower mileages, are unsuitable for operating in high temperature conditions and offer reduced levels of safety. CRI also reports that Chinese media depicts the country’s retreading industry as being “unruly”, with smaller, illegal backstreet operations being the norm.
A third ground for the low level of retreading is a lack of enforced government regulations discouraging less environmentally friendly means of tyre disposal. CRI analyst Join Liu believes the financial crisis presents an opportunity for the Chinese retreading industry. Liu relates that it will be positive not only in the sense that more vehicle operators will look upon retreads as a more cost effective tyre option. The industry itself, Liu opines, will mature to a greater extend, with some of the smaller and less technologically developed operations closing down and stronger, more progressive businesses flourishing in their place. A growing trend in the Chinese retreading industry, says Liu, is the increasing participation of tyre manufacturers in this sector. Leading global manufacturers Michelin, Goodyear and Bridgestone all participate in the Chinese retreading industry; amongst one of the earliest internationals to set up shop was Michelin, who opened its Shanghai retreading facility in September 2005.
In January 2009 Bridgestone (China) Investment Co., Ltd. officially set up its tyre retreading development department. Domestic competitors, such as the Triangle Group, have already entered the industry or are planning to do so. Liu maintains the view that tyre retreading volumes will increase by 30 per cent to 15 million pieces in 2009 and the following year will reach 19 million. Increased government investment in highways and demand for tyres for the construction industry will help such levels be reached.