Drawing from countries in Europe and US, Regrip aims to build a network of exchange centres in India. These centres will work as refurbished tyre shops wherein customers come with their old tyres and leave with a refurbished one.

India has finally eased Covid-19 restrictions after over two years of anxiety, fear and vicissitudes. Amid the newly found exuberance of industries, the tyre refurbishing market has rolled out the red carpet for another player – Regrip. The brainchild of Tushar Suhalka and Pratik Rao, Gurugram-based Regrip is committed to make refurbished tyres for commercial vehicles in the country. An insightful conversation with Suhalka revealed how he conceived the idea to build the new-age tyre company to its future plans.

 “There were several factors behind the starting of the business,” stated Suhalka, adding, “I was employed as a sales and business head with a start-up and closely worked with transporters. I realised there was a massive demand for affordable tyres as new tyres were getting costly by the day. In the last two years, new tyre prices have shot up by 25 percent and still continue to rise owing to a hike in fuel prices.” 

He added, “Transporters have to spend a great deal of money on fuel and tyres. As fuel expenses cannot be curtailed, they tend to retract on tyre spending. For big fleet owners, procuring tyres is a massive expense as the drivers don’t care much about tyre life while driving, and it adds to the operational costs. The ban on Chinese tyres added to their sorrows as the low-cost tyres had owned 35-40 percent market share by 2016.” 

“Secondly, tyres do not decompose. End-of-life tyres are used to make either reclaimed rubber, carbon black, pyrolysis oil or they end up in landfills. Most of the end-of-life tyres are used in furnaces, causing pollution. Only 20 percent of tyres in the country is recycled while the rest end up in landfills and as furnace oil. Hence, I came up with the idea of buying used tyres, recycling them and supplying the refurbished wheels to transporters,” he explained. 

The executive feels that there is a need for refurbished tyre companies in India that ensure quality through standardised processes. Regrip also provides warranty on its tyres, which are at par with new tyres in terms of life, claimed Suhalka. 

The company procures old tyres from the open market and other sources and then processes them. Regrip adheres to standard criteria to procure the tyres for ensuring quality

While procuring tyres, the first step to be followed is checking the tyre quality, the casing and rubber strength. The second step comprises examining the rubber wheels for any leakage on the body or cracks on the sidewalls.

Once the wheels reach the manufacturing unit, they are again subjected to 25-30 quality parameters before further processing. 

Speaking on how the tyres are procured, Suhalka explained, “We have developed a procurement cell that buys wheels from three channels. We procure tyres from big fleet owners.”

“Our second procurement channel is the open market. Small transporters sell their tyres to old tyre dealers who then bring them to their hub. These dealers pick up tyres each day from a number of small transporters in a given locality. The lot includes scrap tyres, torn tyres etc. They then segregate it into three categories. The first category comprises tyres that can be retreaded. The second has tyres that are a little torn and can be used as a Stepney, and the last has bad tyres. Hence, we buy tyres from the first category,” he added. 

The third channel facilitates buying tyres directly from the transporters.

 Drawing from counties in Europe and US, Regrip aims to build a network of exchange centres in India. 

These centres will work as refurbished tyre shops wherein customers come with their old tyres and leave with a refurbished one. 

The company has embarked on a journey to create such a model through its dealer networks on the highway in different cities. It plans to identify petrol pumps and shanties on highways to set shops. 

The customers coming to the shop will log into the company’s app to facilitate data analysis of the old tyre. They will then be quoted a price for the old wheel, which will be deducted from the original price of the refurbished one. 

These shops will operate on 100 percent cash basis. The company plans to enter into the franchise model for the exchange centres. 

The executive believes that the new-age model will ensure quality and warranty alongside building a new channel to procure old tyres. It will also save time, money and labour. 

Iterating on the cost effectiveness and tyre life, Suhalka said, “Our tyres are 50-55 percent cheaper than a new tyre. We save 56 litres of oil and 44 kilograms of raw materials while making a refurbished tyre. Our tyres have been tested to run between 85-90 percent of new tyre mileage when fitted properly.” 

Currently, Regrip has a capacity to roll out 3,000 tyres a month from its manufacturing unit in Sona industrial area, Gurugram. The factory uses automatic machinery and is powered by solar energy emitting zero carbon footprint. The company also has plans to lease a plant in Pune or Hyderabad to expand its operations. 

Answering whether Regrip plans to foray into other tyre segments, the company director informed, “We have OTR tyres in our kitty but focus only on commercial tyres as their utilisation is high. The commercial tyre market is huge in the country with over 8.5 million trucks plying on the roads.

 Commenting on whether the ban on Chinese tyres has bolstered their operations, Suhalka contended, “The ban on Chinese tyres has not influenced us as we are a new company that started operations seven months ago. We have received an immense response with a 95 percent repeat order rate. Even if Chinese tyres come into the market, it won’t be a threat for us as there is no warranty on the tyres. However, the ban has accelerated our acceptance. Moreover, they have changed the buying behaviour of the customers.” 

The company has a sales team with over a decade of experience in the domain. The entire team is of veterans, which has allowed Regrip to ensure quality and have a robust dealer network. 

Speaking on the challenges, Suhalka said, “The retreading market is mostly unorganised and many players operate on cash basis. Secondly, the market is unorganised. Thirdly, transporters want low prices, ignoring quality; hence, we have to make them understand the benefits of our tyres.” 

“Our vision is to build a habit where customers will shed their old tyres and take a new one through exchange points. Secondly, we want to develop the model across the highways for commuters. We are also planning to digitise the entire process from procurement to selling through our app. This process is 50 percent complete,” added Suhalka. 

Regrip has also come up with a tyre financing model and claims to be its pioneer. It has partnered with NBFCs who extend financing services exclusively to its customers. The pilot project has been launched in Jaipur. 

The company had raised INR 5 million before production started. The executive also hinted at associating with founders of major companies as its investors. 

Talking about future plans, Suhalka informed, “We are planning to deploy a plant at Gandhi Dham as it will help in lowering the logistic costs and also increase the procurement market. We plan to build a 1,000-dealer network and sell 10,000 tyres in the next three years. We have plans to export tyres to East Africa and UAE.” 

The company has sold 2,000 tyres in seven months with zero spend on marketing. Currently, it has a footprint in NCR, Rajasthan, Maharashtra and Chhattisgarh. It has also started operations on a small scale in Telangana. 

Bridgestone Americas announced the launch of Firestone Direct mobile vehicle service for car owners and fleet operators. Firestone Direct brings Bridgestone’s automotive services directly to vehicle owners’ homes or workplaces to offer maximum convenience with safe, contact-free service.

This service uses specially equipped vans operated by certified technicians to perform a wide range of maintenance services, including fluid and filter changes, tire repair and replacement, battery check and replacement, and more. 

Through 2021, Firestone Direct will continue to grow into additional markets across the southeastern U.S., with plans to expand nationwide by 2023. The new service launched first in Nashville and Atlanta and expanded into Orlando and Tampa in March.

Angie Oleson, director of Firestone Direct, said, “Customers are increasingly turning to online shopping and at-home services for convenience and safety, and Firestone Direct is at the forefront of this movement for at-home car care. By bringing trusted vehicle care featuring the latest automotive technologies directly to the customer, Firestone Direct can leverage the expertise of our trained technicians with the ease of online booking and at-home service for maximum convenience.” (TT)

The global electric vehicle (EV) market has taken a tremendous leap forward, with new registrations reaching record market shares in nearly all countries. For the tyre development landscape, the accelerating growth of the EV market means a pervasive transformation.

Boosting circular economy

At Black Donuts, the impact of the EV trend can be seen everywhere, from the tyre designers’ desks to the new practices of tyre testing. Beyond meeting new demands of the EV sector, the procedures and practices are tuned to serve the company’s strategic goal: to spearhead the industry’s shift towards a circular economy.

Black Donuts launched the first EV tyre development projects with its tyre manufacturer customers in 2018. The internal research on EV tyres was initiated even before, at the time of the first EVs entering the market. “The first research project addressed the primary technological challenges: rolling resistance and noise,” says lkka Lehtoranta, Head of Tire and Material Development at Black Donuts.

In tyre design, it is essential to focus on specific aspects to ensure optimal performance for electric cars. Compared to combustion cars, tyres for Evs must carry a heavier load withstand high instant torque – and be efficient and quiet. 

Lately, the focus on tyre technology has shifted towards more comprehensive sustainability. Bio-based materials and compounds are opening new possibilities, and the rapid growth of the EV market accelerates the pace of development. ”The EV trend has highlighted the sustainability of tyres. The demand for bio-based materials and tyre recyclability has significantly increased,” says Jarkko Mällinen, Technology Development Manager of Black Donuts.

In cooperation with its partners, Black Donuts is investigating new possibilities to replace fossil-fuel-based raw materials with bio-based or renewable materials in all products, including studded tyres. The company is currently testing the use of bio-based plastics in stud bodies.

Also, end-of-life tyres are a hot topic in the industry, and Black Donuts is researching how the waste tyres can be recirculated and recycled back into the process. Even the tyre development process is undergoing a renaissance. New design tools for faster tyre development are being introduced, emphasising the key features of sustainable, future proof tyres.

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European PCLT (passenger car and light truck) tyre manufacturing capacity has risen over the past decade to meet increased demand, but there has been a major shift from plants in Western Europe, towards Central Europe and Russia. The move eastwards reflects substantial differences in operating costs between the two regions, specifically in terms of labour costs. Hourly labour rates in Central and Eastern Europe can typically be half to one quarter of those in the highest cost Western European countries. In particular this significant differential has resulted in the transfer of production of lower priced non-premium tyres to larger plants in Central and Eastern Europe. Numerous PCLT plant closures and downsizings in Western Europe have either been announced or enacted during the past 18 months.

In 2019 Cooper Tires ended PCLT tyre production at its small plant in the UK, and Michelin recently closed the PCLT tyre plant in Dundee that manufactured tier-1 brand tyres in lower rim-diameters (≤16”), a shrinking segment of the European market. These closures leave just the two PCLT tyre facilities operating in the country: the Pirelli plants that focus on low volume but high-margin premium tyres.

In Germany, Michelin has announced plans to close its Bamburg plant that also focused on lower-rim -diameter tyres, whilst Goodyear is restructuring operations at its PCLT tyre facilities located in Fulda and Hanau. Total capacity there will fall, but there will be an increase in production of premium tyres.

Pirelli has recently ceased production of car tyres at its Bollate plant in Italy, its only facility in Western or Central Europe that was manufacturing non-premium car tyres. Apollo Tyres plans to downsize PCLT capacity at its plant in the high-cost Netherlands, focusing the facility on high value tyres with short production runs. Management had stated that the company lost money on 70% of the PCLT tyres that it sold from the facility.

Despite these closures in Western Europe, expansion to the east is expected to result in the net addition of 30 million units of PCLT tyre capacity across Europe* by 2026. New plants that have been recently opened, or are currently under construction, are located in either central and eastern Europe or Russia. In 2017, Apollo Tyres opened a greenfield plant in Hungary, with first-phase capacity increasing to 5.5 million PCLT tyres and almost 0.7 million TBR tyres. Supply from the facility has substituted imports from India and now permits the planned downsizing and specialisation of production in the Netherlands.

In 2018, Hankook announced plans to add production of TBR tyres at its plant in Hungary, however this expansion was put on hold in late 2019. In phases, the company has already expanded PCLT tyre capacity until it is now one of the largest such facilities in the world. Meanwhile, Nexen has begun the ramp-up of capacity at its new plant in the Czech Republic; this will have added substantially to the country’s capacity by 2023.

In addition to further investments across Central and Eastern Europe by Continental Tire, Bridgestone and Pirelli, an expansion of premium tyre capacity in Slovenia has also been announced by Goodyear.

In mid-2019 Toyo Tire announced its intention to build a new tyre plant in Serbia, consolidating the country’s position as the leading location for new PCLT tyre manufacturing capacity in Europe. This follows Linglong’s decision to build its new European plant in the country and Cooper Tire’s plan to double the size of its facility. Based on analysis by Astutus Research of all announced capacity actions (plant opening and expansion net of closures and downsizing), Serbia will account for over 40% of planned capacity additions between 2019 and 2026.

Toyo expects to invest €390 million in its new facility that will have a capacity of 5 million units. It intends to start production in early 2022 and reach full capacity the following summer. Linglong’s facility will have a capacity of 12 million PCLT tyres, alongside truck and radial agricultural tyres, built in three phases and representing a total investment of over €800 million.

Serbia as new hub

Although there is demand for both replacement and original equipment PCLT tyres in Serbia, the domestic market is amongst the smallest in Europe and production will be export focused. The country has already emerged as a key source of budget tyres to the European Union and to Russia, predominantly from Tigar Tyre, Michelin’s low-cost tyre subsidiary, that has significantly increased capacity and production in the past decade.

Geographically, Serbia is well located to supply the major markets of the EU and Russia, and benefits from free trade agreements with both. Labour costs in the country are significantly lower than in the Czech Republic or Hungary, and labour availability is good, with a higher rate of unemployment.

At present Toyo imports tyres to Europe from its facilities in Japan and Malaysia; Linglong utilises its PCLT tyre plants in China and Thailand. Both companies aim to develop their presence in Europe, and local production should help them in this quest, particularly in the original equipment segment where the significantly shorter lead times will improve the competitiveness of their offer. Similarly, the opportunity to increase their share of the OE business was one of the motivations for Nexen and Apollo to replace imports to open a plant in the region.

Whilst the influence of the Covid-19 virus may slow the pace of some planned investment in central and eastern Europe, it has already accelerated the pace of closures in the west. Furthermore, we expect that it will result in further plant closures there, as the decline in European tyre demand dramatically reduces plant utilisation rates.

*Europe refers to Western, Central and Eastern Europe, including Russia and CIS, but excludes Turkey which we include in the Middle East & Africa region.

For capacity data: ‘Western Europe’ includes plants in Germany, France, Spain, Italy, the UK, Portugal, the Netherlands, Finland and Luxembourg. ‘Central Europe’ refers to Poland, Romania, Hungary, Czech Republic, Serbia, Slovakia and Slovenia. ‘Russia and CIS’ refers to Russia, Ukraine, Belarus and Uzbekistan.

• Simon Hodson is Research Director at Astutus Research shodson@astutusresearch.com

The WHO has said that the outbreak is now officially a Pandemic. People/ companies/ organisations are still coming to grips on how to address the situation. Government heads of various countries are trying to curb the situation by restricting entries of people who are affected by countries that are affected the most. Thus, airlines would have only diplomats and other certain levels of people allowed to fly.  Many airlines have suspended a good number of their flights.  Many companies will be looking to take a hair cut on what they take back with them, just to see that business can be sustained during the trying situations. 

The virus has led various markets to crash, courier services have been curtailed in certain countries. All types of cancellations, be it sport, expositions or business, have affected the business world over. The transaction value in the losses may be difficult to gauge currently, however, it could be in the millions. Contracts would have to be reworked, and companies may have to come with new strategies. 

However, in every situation, there would be also a business opportunity, if you work your strategy right. The sale of masks, gloves, hand sanitisers, medical devices would be able to generate good business. Though it is seen that the outbreak is from China, you also got to give to them as to how they are trying to contain the situation by building hospital/s within 10 days. In other countries, this would easily have taken a much longer time period. 

It is a given that the business scenario is not going to be the best for most of the companies; Therefore, companies may have to think and reevaluate the way they are currently running their company. Companies will look to get leaner in every possible way. Cut down on unwanted expenses. Many companies have started asking their employees to work from home. Some may look to have lesser number of people and look to automate some of the work, especially in the factories.  Commercial properties being an expensive asset to maintain, some companies may look to perhaps go on rented co working spaces. Use less of one time use items like plastic and use more renewable/ reusable substitutes. Use of more environment friendly methods going forward will be the mantra. 

This hit on our social system in a way will make us pause, think and have better suggestions as to how to look after ourselves and our environment at large.