Green tires are defined as those tries, which are lighter in weight, make the vehicle fuel-efficient, have lower rolling resistance, long-life, and retreadable tire, which is produced from renewable materials. The production process for these tires does not require excessive amount of energies while manufacturing of these tires and the pollution generated is relatively low.
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Increasing demand for fuel efficient vehicles and government initiatives for environment protection are major factors driving growth of the market
Growing demand for fuel efficient vehicles, due to low availability of convectional fuel is one of the major driving factors for growth of the market. This green tire helps in reducing consumption of fuel, as it creates less amount of friction while moving the vehicle on road. This reduces rolling resistance of the tire, which further lessens fuel consumption of vehicles. This factor in turn helps in reducing fuel consumption by 5–15%. According to the California Energy Commission (CEC) analysis, the adoption of low-rolling resistance tires could save 1.5–4.5% of all gasoline consumption. Thus, adoption green tire will positively help in reducing consumption of fuel, which in turn helps in propelling growth of the green tires market during the forecasted period (2018–2026).
Lack of awareness is one of the major factors restraining growth of the market
Factors restraining growth of the market is lack of awareness regarding the benefits of green tires among manufacturers in emerging economies such as India and China. Thus, auto manufacturers in these countries are not able to incorporate these tires in vehicles, which further restricts adoption of green tires in this particular region. Moreover, high cost of green tries is another factor affecting growth of the market. For instance, according to the Coherent Market Insights analysis, the price of Michelin’s XL ICE XI3 GNX(Green Tire) was US$ 111.97/tire and the prices of MRF ZEC(Normal Tire) US$ 23.92/tire.
Global Green Tries Market: Segment Trends
Among vehicle types, the passenger cars segment accounted for the largest share in the green tires market in 2017. This is owing to increasing sales of these vehicles, worldwide. According to International Organization of Motor Vehicle Manufacturers, in 2016, around 70 million units of passenger car were sold worldwide. Growing passenger cars per thousand inhabitants reached to 182 per thousand inhabitants in 2015 from 178 in 2014, which is major factor fuelling growth of passenger cars segment. Hence, increasing sales of passenger vehicles will inadvertently increase demand for green tries. This is expected to aid in growth of the segment over the forecast period.
Global Green Tries Market: Regional Insights
Europe accounted for the largest market share in 2017 and is expected to retain its dominance during the forecasted period. This growth is attributed to stringent government regulation regarding emission control. For instance, the European Union has set emissions standards. EU Regulation No 443/2009 sets an average CO2 emission target for new passenger cars of 130 grams/kilometre. This target was gradually set for the period of 2012 and 2015. A target of 95 grams per kilometre will apply from 2021. For light-commercial vehicles, the average CO2 emission in 2012 was 180 g/km and the target set for 2017 was 178 g/km. Thus, increasing government concern towards environmental protection will further drive automotive manufacturers to incorporate green tire in the vehicles. Hence, this factor will help in propelling growth of the green tries in this particular region.
Global Green Tires Market: Competitive Landscape
Major players operating in the global green tires market are Michelin, Bridgestone Corporation, The Goodyear Tire and Rubber Company, Hankook Tire Group, Pirelli & C. S.p.A., Cheng Shin Rubber, Kumho Tires, ZC Rubber Group Co. Ltd, Nokian Tires, and Apollo tires Ltd.
Key players in the market are focusing on adopting merger and acquisition strategy, in order to gain the competitive edge in the market. For instance, in July 2015, Michelin acquired Meyer Lissendorf, a car tire wholesale specialist in Germany. The aim of acquisition is to strengthen Michelin’s distribution network in Germany by consolidating its position in the small and medium retailer redistribution market. This strategy will help the company to strengthen their access in the European market by developing the distribution channels in region.
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