A quantitative approach to assessing the profitability of car and truck tire remanufacturing

Over 600,000 tons of used tires are annually disposed of in Germany. Given the legal framework and the limited landfill capacities, particular attention has been given to the environmental impacts of tire recycling. Dedicated life cycle assessments point out tire remanufacturing, also called retreading, as the most sustainable recovery alternative. Nevertheless, retreading still remains only one alternative among others with a fraction varying from 1% up to 80% market share depending on the tire type. Thus, the primal purpose of this case study is twofold: to ascertain the reasons for such discrepancy and to investigate to what extent remanufacturing activities could be extended. This first requires an analysis of the present situation in both car and truck tire markets. In the following, we apply an OEM-centered decision model in order to analyze potential future scenarios concerning their ability to raise remanufacturing rates. We find out that retreaded truck tires have exhausted their remanufacturing potential whereas a customer-sided bottleneck hinders further development in the car tire market. Finally, we conclude that the question whether an OEM should add retreaded tires to his current product mix mostly depends on a product's nature, either functional or psychosociological. Only functional products have enough remanufacturing potential to justify an extension of supply chain planning towards recovery. (c) 2004 Elsevier B.V. All rights reserved.