UAE Tire Market Growing at a Breakneck Speed: Projected to Grow at a CAGR of 8.5% by 2027
Published | 03 December 2021
The tire market in the UAE is growing at a high CAGR as demand for private vehicles is increasing due to consumers’ strong purchasing power. Increased foreign investment in the country's automobile industry also promotes the market's growth….
A recent study conducted by the strategic consulting and market research firm, BlueWeave Consulting, revealed that the UAE tire market is estimated to grow at a CAGR of 8.5% during the forecast period. UAE tire market is primarily driven by increasing demand for private vehicles. The growth of the market is also attributable to the increasing foreign investment and consumers’ high purchasing power. Furthermore, favorable government initiatives and strict tire safety regulations, which require tire replacements every five years is also powering the UAE’s tire market. The UAE authorities prohibit the use of used tires on safety grounds which further acts as a driving factor for the tire market. However, increasing pollution caused by discarded rubber tires may act as a huge restraining factor for the UAE tire market.
Growing Demand for Commercial Vehicles strengthening The UAE Tire Market
According to an estimate, there were around 235 thousand commercial vehicles sold in the UAE in 2019. The demand for commercial vehicles is increasing at a high rate in the country, mainly because of the rapid economic development. Light and medium-sized vehicles are being used in the country to transport light goods while heavy vehicles such as trucks are being deployed around oil fields as well as commercial sites. Furthermore, the increasing popularity of cab services and ride-hailing services in the UAE is also boosting the demand for commercial passenger cars. Thus, with an increase in commercial vehicles, tire demand is also expected to surge during the forecast period.
Expanding Automobile Production in the UAE is Driving Market Growth
With an increasing focus on economic diversification, the UAE government is significantly investing in automobile production in the country. Locally produced vehicles are few in number, but demand is high; thus, the country imports vehicles to keep up with demand, which drives up prices. Consequently, many leading car companies, such as Ashok Leyland, W Motors, Hafilat Industries, etc., are establishing their production plants in the UAE to take advantage of this untapped market.
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UAE Tire Market - By Distribution Channel
Based on distribution channels, the UAE tire market is segmented into online distributors and offline distributors. The offline distributor segment accounts for the largest market share because of the consumers’ inclination towards trusted product dealers. However, the online distribution channels are projected to witness the highest growth rate during the forecast period. The online platform offers great deals and discounts, which attracts consumers. The leading companies are launching their websites to tap on the trend and are showcasing their wide range of products under one roof. This is anticipated to influence the overall tire market growth in the forecast period.
Impact of COVID-19 on the UAE Tire Market
The growth of the UAE tire market was negatively impacted by the unprecedented outbreak of the COVID-19 pandemic. The trading of new and used cars was restricted due to the pandemic-induced lockdown as well as the declining purchasing power of the consumers. Moreover, due to lockdown restrictions, vehicles were not required to undergo periodic maintenance, which affected the demand for tires. Furthermore, tire demand among OEMs declined due to social distancing norms and a labor shortage. However, the market is expected to rebound over the next five years, as the region gets back on track with large-scale projects.
UAE Tire Market - Competitive Landscape
The leading players in the UAE tire market are Michelin, Goodyear Tire and Rubber Company, Dunlop Tyres, Continental AG, Bridgestone Corporation, Pirelli & C. S.p.A., Yokohama Rubber Company, Cooper Tire and Rubber Company, Hankook Tire & Technology, Firestone Tire and Rubber Company, and other prominent players.
The market is dominated by multinational tire manufacturers, such as Bridgestone, Pirelli, Michelin, etc. The companies offer a wide range of tires composed of various materials and for different types of vehicles to grab a larger share in the market. The market players also offer advanced tires address varying driving conditions and spend heavily on advertising and marketing to create brand awareness. Furthermore, the adoption of marketing strategies like partnerships, mergers, acquisitions, joint ventures, etc., is also prominent in this market.
The in-depth analysis of the report provides information about growth potential, upcoming trends, and statistics of the UAE tire market. It also highlights the factors driving forecasts of total market size. The report promises to provide recent technology trends of the UAE tire market and industry insights to help decision-makers make sound strategic decisions. Furthermore, the report also analyses the growth drivers, challenges, and competitive dynamics of the market.
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