With the positive growth of the automotive industry, the global automotive tire market is witnessing a steady rise in demand. The automotive sector is focussing more on customer safety and comfort, and hence the demand for technologically advanced and durable tires is increasing. While the demand for radial tires is high across the heavy commercial vehicle, light commercial vehicle, and passenger vehicle segments, bias tires are being extensively used in the two wheelers segment. The increasing focus on the quality and safety standards is expected to define the future outlook of tire manufacturing.
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Asia Pacific to be the Largest Market for Automotive Tires in Coming Years
Europe, North America, Asia Pacific, and Rest of the World are the key regions of the global automotive tire market. In 2014, Asia Pacific dominated the overall market and stood at a valuation of US$81.49 bn. In the coming years, the Asia Pacific automotive tire market is anticipated to register the fastest growth. This can be attributed to the increasing demand for luxury vehicles, positive economic growth in the developing countries, and the rise in production of vehicles in the region. Japan and China contribute majorly towards the growth of the automotive tire market in Asia Pacific. Europe is projected to be the second largest automotive tire market in the near future.
Product Innovation, Acquisitions, and Partnerships- Key Strategies for Players in Global Automotive Tire Market
Some of the key players in the global automotive tire market are Goodyear, Bridgestone, Continental, Michelin, Pirelli, Yokohama, and MRF Tyres. The growing demand for cheaper and technologically advanced tires has led system integrators and OEMs to heavily invest in research and development activities. Companies such as Bridgestone and Continental are investing about 4.5% of their total sales into research activities. Product innovation has emerged as one of the key points to create a positive brand image in the global automotive tire market. Green tires with high energy efficiency and durability are in demand and the market players are focussing on the development of such tires while adhering to the safety standards.
Market Players Focusing in Acquisition Opportunities to Gain Competitive Edge
Apart from product innovation, market players are looking at potential acquisition opportunities. South Korean tire manufacturer Hankook Tire Co. is looking at such opportunities to expand its business. The company decided to buy a stake in Halla Visteon Climate Control Corp. Hankook Tire is planning to increase its global market share from the current 8% to 10% by 2020.
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Partnering with international sports authorities has emerged as an effective channel for brand promotion for the tire manufacturing companies. MRF Tyres have been chosen as the global partner for International Cricket Council (ICC) events from 2016-2020. MRF had been a successful partner of ICC at the Cricket World Cup 2015. Further, the company has set up the MRF Pace Foundation that has promoted and helped a number of fast bowlers. While Bridgestone is a sponsor of both the summer and winter Olympics till 2024, Yokohama is the shirt sponsor for soccer club Chelsea for the next five years.