UK Withstanding Truck Tyre/Retreading Downturn Well

Following a decade of steady growth in demand averaging 10 per cent, last October the financial and economic crisis pushed European retreading markets into a freefall. The largest decline was listed by market participants in the opening quarter of this year, and according to Marangoni demand for retreaded tyres in Europe reduced by a quarter. Yet at the same time, the market for new truck tyres dropped some 30 per cent. In the second quarter, demand was still some 15 per cent below that of the previous year, while the new tyre industry recorded sales a clear 25 per cent worse – another result reflecting the new tyre industry’s greater difficulties.

Following a decade of steady growth in demand averaging 10 per cent, last October the financial and economic crisis pushed European retreading markets into a freefall. The largest decline was listed by market participants in the opening quarter of this year, and according to Marangoni demand for retreaded tyres in Europe reduced by a quarter. Yet at the same time, the market for new truck tyres dropped some 30 per cent. In the second quarter, demand was still some 15 per cent below that of the previous year, while the new tyre industry recorded sales a clear 25 per cent worse – another result reflecting the new tyre industry’s greater difficulties.

June performance, reports Marangoni Retreading Systems managing director Giuseppe Ferrari, admittedly lagged some 5 per cent behind that of last year, yet Marangoni calculates that demand during the second half of the year will return to last year’s levels. This points towards, says Ferrari, “optimism for the future,” even though whole year 2009 will probably end up around 10 per cent down. As was the case in previous downturns, he now expects a “sudden and massive market recovery.” Ferrari anticipates the start of this recovery to arrive next year.

The fact that not every market is affected to the same degree – as is the case during every downturn – also holds true for the retreading industry. While Eastern Europe, Germany and Spain/Portugal have suffered from a drop in demand, the UK and Turkish markets were helped by their currencies. The weaker pound, for example, led to increases in the cost of (imported) new tyres, and retreaders were able to hit home their advantage in light of this.