Germany Green Tire Market Assessment, By Vehicle Type, By Rim Size, By Sales Channel, By Application, By Region, Opportunities and Forecast, 2017-2031F

Germany green tire market is projected to witness a CAGR of 4.05% during the forecast period 2024-2031, growing from USD 517.4 million in 2023 to USD 710.83 million in 2031. The market has experienced significant growth in recent years and is expected to maintain a strong pace of expansion in the coming years.

Automotive tires are an essential component, which cover the wheel rim with inflated rubber tubes. They help maintain the grip on the road while providing traction between the road and vehicle to absorb shocks during any impacts. With the growing awareness about environmental and energy issues, tire manufacturers are slowly inclining towards sustainable raw materials to manufacture environmentally friendly tires. Green tires use plasticizers like silica and silane resins that are bonded together in tread block which maintain safety on road during rains and preserve energy while driving due to lower rolling resistance, while reducing carbon emissions. Nowadays, these eco-friendly renewable materials are preferred due to the significant advantages including lightweight materials which result in overall weight reduction of the vehicle as well as improved durability and fuel efficiency in tires.

The market for green tires is expanding due to government measures to promote a clean and green environment as well as growing consumer demand for fuel efficiency. Additionally, the growth of green tires in Germany is being driven by consumer consciousness and thoughtful purchasing choices. Drivers are becoming more conscious of their environmental choices and realizing the economic advantages of reduced fuel use and longer tire life. Tire producers have been forced by consumer demand to spend money on research and development to create new tire compositions and tread designs that maximize fuel efficiency without sacrificing performance or safety. Moreover, partnerships among tire producers, vehicle manufacturers, and academic institutions propel green tire industry innovation. Partnerships are encouraging the development of breakthrough tire technologies such as sustainable materials derived from renewable sources and clean manufacturing methods that lessen the environmental effect of tire manufacture.

For instance, in December 2023, Nokian Tyres GmbH entered a partnership with German retreader RuLa-BRW, which will utilize the tire manufacturer's "innovative Noktop retreading material" in the pre-cure retreading process and sell these tires in the German market.

Government Regulations and Emission Reduction Targets Boost Green Tire Market

Government restrictions considerably impact the tire industry, owing to the environmental concerns associated with tire manufacturing, use, and disposal. These procedures can potentially emit hazardous and poisonous compounds into the environment, needing strict regulatory control. Germany, being a part of the European Union, faces stringent environmental regulations and ambitious carbon reduction targets. Regulatory frameworks such as the European Green Deal and the Paris Agreement commit the country to significant reductions in carbon emissions. Green tires, with an emphasis on using sustainable materials and improving fuel efficiency, play an important role in helping automobile manufacturers and consumers, respectively.

European governments promote the use of sustainable and environmentally friendly technologies and products. In some cases, the government offers incentives, subsidies, and tax benefits to consumers and manufacturers who choose eco-friendly products, such as green tires. These benefits contribute to the rise in demand for green tires and will boost market growth by making these tires more cost effective.

For example, EU regulation (EC) No. 1222/2009 requires manufacturers to label tires with full information about their fuel efficiency, wet grip, and noise rating, thereby actively pushing the use of environment friendly green tires.

Increased Consumer Demand for Fuel-efficient Solutions

Consumer demand for fuel-efficient vehicles is driving the introduction of green tire technology. Green tires are regarded as an economically viable purchase in Germany, where fuel prices remain high, and drivers emphasize cost reductions. Green tires reduce rolling resistance and boost fuel efficiency, and appeal to consumers looking for cost-effective solutions. Furthermore, consumer awareness and education programs are important in green tires' growing popularity. Manufacturers, industry associations, and regulatory authorities are working together to educate customers about the benefits of green tires, including reduced fuel use, lower emissions, and longer tire life. These programs are helping to close the information gap and promote the usage of eco-friendly alternatives.

For example, in September 2023, Continental AG revealed its innovative tire concept, Conti CityPlus at the IAA Mobility in Munich, Germany. The tire technology improves tire energy efficiency by up to 10%, resulting in lower CO2 emissions from combustion engines in passenger cars and longer driving range of electric vehicles.

Green Tires Gain Momentum as Electric Vehicles Trend

In April 2023, the German auto industry association, VDA anticipated a 50% increase in the production of electric passenger cars in Europe's largest economy, projecting the total to exceed one million for the year 2023. The surge was attributed to the growing demand from foreign markets and the increased focus of car manufacturers on scaling up e-mobility production. Electric vehicles bring with them distinct requirements for tires, due to their specific design and operational behavior. It include instant torque delivery, regenerative braking, and a unique weight distribution, which require a specialized approach for tire production. Green tire makers are rising to the challenge, using cutting-edge techniques and materials to create tires that are perfectly suited to the needs of electric vehicles. These tires provide excellent performance and help to improve the vehicle's overall efficiency and environmental imprint.

For instance, in June 2023, Continental AG launched the UltraContact NXT tire comprising of up to 65% of renewable, recycled, and mass balanced certified materials. The company states that the tire has been designed for both electric and internal combustion engine vehicles and can be used in a range of vehicles including Volkswagen Golf, Mercedez-Benz EQA, Tesla Model 3, and Skoda Octavia, among others.

Dominance of Passenger Vehicles Segment

Passenger cars presently dominate the German green tire market, and the trend is projected to continue in the future. The growing desire for private vehicle ownership is strongly related to the growing fleet of passenger automobiles. To meet increased passenger vehicle demand, automakers are increasing production and import capacity. Tire demand has increased nationwide, benefiting tire manufacturers and distributors and customer accessibility and affordability. Furthermore, the high purchasing power of the German people has a positive impact on the German green tire industry. Furthermore, the country has a large percentage of cost-conscious clients, which is driving up used car sales and advancing the green tire business. Besides meeting tremendous local demand, Germany serves several foreign vehicle markets across the world. Three-quarters of all autos built in Germany are exported around the world, strengthening the country's OEM tire business.

For instance, in February 2021, Nokian Tyres GmbH is expanding its Hakkapeliitta line for passenger cars including SUVs, crossovers, and electric vehicles. The product uses Nokian's Eco Stud 10 technology and will be available in over 140 sizes, with rim diameters ranging from 14 to 22 inches.

Future Market Scenario (2024 - 2031F)

• The green tire market is growing due to increased demand for low rolling resistance tires, which improve fuel efficiency and reduce emissions.

• As environmental concerns drive demand for more sustainable technical solutions, energy-efficient green tires will gain traction.

• The electric vehicle market is expected to drive significant growth in the green tires market, driven by increased adoption and demand for sustainable and eco-friendly solutions.

• Germany, a major automotive export hub, is renowned for its advanced R&D, skilled workforce, and infrastructure, making it an ideal market for green tires. With numerous leading tire manufacturers and companies, Germany green tire market is expected to grow in a continuous pace in the forecast period.

Key Players Landscape and Outlook

Key participants in the green tire market are expected to ensure the market growth by implementing both organic and inorganic tactics such as product launches, investments, and expansions, as well as collaborations and agreements. Germany is one of the leading consumer of green tires as it has a major automotive export hub. Furthermore, well-known tire manufacturers are making significant investments in research and development to build cutting-edge green tires. These tire innovations cover a wide range of aspects, from the use of renewable materials to the introduction of energy-saving designs, which contribute significantly to the market's growth. With a strong emphasis on sustainability and environmental consciousness, these developments are transforming the tire business and paving the way for a greener and more eco-friendly future.

In September 2022, Evonik entered a strategic collaboration with the Porner Group and Phichit Bio Power to provide sustainable Ultrasil precipitated silica to several tire manufacturers. Silica is used to manufacture green tires and aids in reducing fuel consumption by 8% compared to conventional tires. The partnership aims to enable use of renewable raw materials, leading to more sustainable production of tires.