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3 reasons why you should add tyre retreading to your auto business

  • Highlights

  • Increased adoption of retreaded tyres among drivers

  • GST has reduced the price of tyre retreading

  • A rise in the sale of commercial vehicles has grown the need for tire retreading

  • Invest in your auto shop with a Bajaj Finserv Business Loan

The process of restoring worn-out and damaged tyres with new treads is known as retreading. This is done using either a hot or cold process and is a good fit for trucks, SUVs, vans and cars. Most importantly, a retreaded tyre can clear a performance check much like a new tyre. In India, at present, retreading dominates 50% of the organised tyre segment. Also, retreading is an environment-friendly process as it recycles the old tyres with only 26.5l of oil as compared to the 83.2l used in the manufacturing process. So, retreading can add more efficiency to your auto business and win you new customers when done right.

Here are the 3 main reasons why you should include retreading to your business model.

1. Preference of retreaded tyres over new tyre

Retreaded tyres have the same life as a new tyre and are comparatively less costly. Thus, consumers prefer buying retreaded tyres instead of a brand-new set. With proper retreading, you can extend the life of an old tyre, and in a way, recycle them. As a result, adding this process to your present business is beneficial, as it will allow you to cater to customers who are looking to retread tyres as well as buy new ones.

However, bear in mind that this will require significant investment, as you will have to buy a buffing machine as well as a retreader. But, don’t let this stop you from increasing your bottom line. To fund this, you can avail a Machinery Loan up to Rs.30 lakh from Bajaj Finserv. This is an unsecured loan and allows you to borrow using a Flexi Loan facility. Here, you can withdraw from the total sanction in instalments, as per your needs, and pay interest only on the amount that you use. Additionally, to keep costs low, you can choose to pay interest-only EMIs and then repay the principal when the tenor lapses.

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2. Price reduction of retreaded tyres after GST

GST has been introduced with an aim to boost the Indian economy, and as a result, the demand for retreaded tyres has gone up because of lower prices. So, more and more people are considering retreading tyres, as they are 30–50% cheaper as compared to new ones. This gives you an opportunity to capitalise on the rising demand before your competitors catch up. Also, with GST formalising the economy, there is greater movement of goods across the country, which in turn has created a greater demand for retreading services.

3. Increase in sale of commercial vehicles

This year, the commercial vehicles industry has registered its highest sales numbers in the past five years and shows no signs of slowing down. In 2017–2018, the industry grew by around 20%, with 7.14 lakh units being sold in 2016–2017, and 8.56 lakh units being sold the year after. The increase in commercial vehicles that traverse through the country spells good news for you. As tyre retreading is more economical, commercial freight service providers are increasingly considering this option.

Tyre retreading creates a win-win situation, one where both you and your customer are happy. It saves them money, and allows you to add to your revenue. So, make the initial investment in this diversification by using funds instantly through your pre-approved offer, and set your business up for greater success.

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