GCC Off the Road (OTR) Tire Market Research Report: Forecast (2024-2030)

Market Definition

Off-the-road (OTR) tires are heavy-duty tires designed for use on vehicles that operate off paved surfaces, such as those used in construction, mining, and agriculture. These tires are distinguished by their strong structure, deep tread patterns, and puncture-resistant materials, allowing them to handle extreme off-road conditions. OTR tires are available in various sizes and styles to fit many vehicles, including huge dump trucks and loaders, agricultural tractors, and forestry equipment.

Market Insights & Analysis: The GCC Off the Road (OTR) Tire Market (2024–30):

The GCC Off the Road (OTR) Tire Market size is estimated to grow at a CAGR of around 4.2% during the forecast period, i.e., 2024–30. The market growth imputes the surging focus of government bodies in GCC countries on infrastructure development as a means of diversifying their economies away from oil and gas. The government is investing in several construction projects in countries such as Saudi Arabia, the UAE, Qatar, Oman, and other nations. The increase in construction is driving up demand for vehicles such as trucks, excavators, bulldozers, and so on, raising demand for OTR tires. Furthermore, governments are implementing favorable regulations to encourage international investments and leading manufacturers to construct OTR tire production plants to meet the increasing demand, hence fueling market growth & expansion.

Furthermore, the strategic location of the GCC countries along major shipping routes makes investing in port infrastructure crucial for facilitating global trade. As a result, several GCC countries, like the UAE, Qatar, etc., have been investing in expanding and modernizing their ports to accommodate larger vessels and increase cargo-handling capacity. For instance,

• In 2022, the UAE inaugurated the Khalifa Port expansion, a major development project with a total investment of around USD 1.08 billion.

This growing infrastructure in the development of the trade & logistics sector of the region is contributing to the demand for OTR tires, as they are required in port operations for handling containers, heavy cargo, and logistics activities. Heavy machinery such as forklifts, excavators, etc. rely heavily on OTR tires, generating their demand and ultimately augmenting the size & volume of the GCC Off the Road (OTR) Tire Market.

Moreover, the establishment of new mining projects in countries such as Kuwait, Saudi Arabia, etc. is further driving up demand for heavy mining vehicles. The rising need for minerals and metals fuels mining exploration activities in the GCC countries has resulted in increased demand for large off-road vehicles. For Instance,

• In 2023, AlMasane AlKobra Mining Co. announced the start of the exploration of zinc and copper in an area spanning over 138.64 sq. km in Saudi Arabia.

Heavy mining equipment relies on OTR tries to navigate undulating terrain and mining areas, which causes frequent damage to OTR tires. With the frequent wear and tear, the demand for replacement tires increases, ultimately driving the growth of the GCC OTR Tires Industry.

The GCC Off the Road (OTR) Tire Market Driver:

Surging Residential & Commercial Infrastructure Projects to Augment OTR Tire Demand – Rapid urbanization and population expansion have increased demand for new housing, commercial spaces, and infrastructure development projects in the Gulf Cooperation Council (GCC) countries. Additionally, government efforts such as Saudi Vision 2030, UAE Vision 2021, and Qatar National Vision 2030, which prioritize infrastructure development, have resulted in a surge in construction projects across the region. For Instance,

• In 2022, the Dubai Municipality announced the construction of a housing structure for about 8,000 people in the city under a project named Al Quoz Creative Zone.

With increased construction and infrastructure development activities, the need for construction vehicles such as road rollers, bulldozers, and other machinery that runs on OTR tires is surging significantly. Owing to the tough and rough terrain on these construction sites, the OTR tires suffer frequent wear and tear and exterior damage, necessitating tire changes. As a result, with the increase in construction, demand for OTR tire replacements increases, consequently boosting the revenue growth of the GCC Off the Road (OTR) Tire Market.

The GCC Off the Road (OTR) Tire Market Opportunity:

Increasing Government Initiatives for the Agriculture Sector Offering Lucrative Opportunities – Governments across the region are fostering various initiatives to promote agricultural production in the region. The shifting focus of the GCC countries towards self-sufficiency in food production is leading them to launch various programs and initiatives for boosting the agriculture sector. The government bodies have been providing substantial investments in modernizing agricultural infrastructure, including irrigation systems, greenhouses, and storage facilities, to increase productivity and mitigate the impact of water scarcity on crop yields. For instance,

• In 2023, the Saudi Arabian government granted the Saudi Agricultural Development Fund about USD 610 million to boost the agriculture sector in the country.

With the rising agriculture sector, the demand for agriculture machinery and vehicles is expected to soar, which heavily relies on OTR tires. With the surging agriculture activities, the tires would suffer from deterioration due to undulated agricultural lands, creating a demand for OTR tire replacement and serving as opportunities for growth & development of the OTR tire industry in the region.

The GCC Off the Road (OTR) Tire Market Challenge:

Increasing Popularity of Retreated OTR Tires Impeding Market Growth – The increasing awareness of environmental concerns and regulations regarding tire disposal and waste among GCC countries such as Saudi Arabia, the UAE, Qatar, etc., has surged the production of retreaded tires in the region. Moreover, the presence of retreaded tire manufacturers such as Al-Jawad Tire Retreading, General Group, Al Howail Tyre Retreading Factory, etc. providing a vast variety of OTR tries to consumers further boosts the growth of retreaded tires in the region.

The increased demand for retreaded tires in the construction, mining, and agriculture industries is due to their cost-effectiveness since they provide a more reasonable option without sacrificing quality or performance. As a result, end users looking for low-cost, conveniently accessible options have driven up demand for retreaded tires in the region. This growing preference among end users for retreaded tires is severely impeding the adoption of new OTR tires, negatively impacting the industry's growth.

The GCC Off the Road (OTR) Tire Market Trend:

Surge in Green Energy Projects Changing Dynamics of the OTR Tire Industry – There is a remarkable surge in the escalation of renewable energy projects in the GCC countries, driven by a rising focus on the diversification of energy sources away from traditional fossil fuels. Governments in the region are implementing ambitious renewable energy targets and policies, offering attractive incentives such as subsidies, tax breaks, and power purchase agreements to attract investment and stimulate growth in the sector. For Instance,

• In 2022, the UAE made substantial investments of nearly USD 45 billion in renewable energy projects.

With increasing investments, the construction of renewable energy projects such as solar plants and wind power plants in countries such as the UAE and Saudi Arabia is rising. With the surging renewable energy projects, there is an increasing need for heavy machinery and equipment with OTR tries to support construction, installation, and maintenance activities. This uptick in green energy projects drives significant demand for OTR tires, as specialized vehicles and equipment utilized in these projects require durable tires capable of navigating diverse terrains and challenging environments, serving as a major trend in the market.

The GCC Off the Road (OTR) Tire Market (2024-30): Segmentation Analysis

The GCC Off the Road (OTR) Tire Market study of MarkNtel Advisors evaluates & highlights the major trends and influencing factors in each segment. It includes predictions for the period 2024–2030 at the regional level. According to the analysis, the market has been further classified as:

Based on End Users:

• Construction
• Industrial
• Mining
• Agriculture
• Ports

Out of them all, the ports segment is leading the market and is anticipated to hold a major share of the market during the forecast period, owing to increased investments in port expansion and an increase in cargo traffic. Trade between the GCC and other nations expanded dramatically between 2018 and 2022, owing to increased trade agreements between the GCC and countries such as Canada, the United States, the European Union, etc.

The GCC's rise as a key player in world trade has increased the need for the port's expansion to handle the enormous volume of shipments transported and received, fueling the overall expansion of port projects. The construction of ports such as Hutchison Ports Sohar and Mubarak al-Kabeer Port has created the demand for earthmoving OTR trucks for activities such as excavation, digging, leveling, etc., and once completed, the demand for material handling equipment such as forklifts becomes indispensable for operations, boosting segment revenue growth.

Based on Sales Channel:

• Direct Sales
• Online
• Multi Brand & Exclusive Stores

Sales through multi-brand and exclusive outlets have been steadily increasing, as people prefer to buy tires from these stores since they offer a diverse selection of options from brands such as Goodyear, Bridgestone, and others at a single point of sale. As a result, multi-brand stores' ability to provide a greater selection and price comparison between different tire manufacturers and variants will continue to enhance tire sales. Furthermore, users frequently value the option to compare costs and features across various OTR tire companies. Multi-brand stores make this comparison easier, allowing customers to make informed judgments based on aspects including pricing, quality, and tire features. This would significantly increase sales through multi-brand & exclusive stores in the region in the coming years.

The GCC Off the Road (OTR) Tire Market (2024-30): Regional Projections

Geographically, the GCC Off the Road (OTR) Tire Market expands across:

• The UAE
• Saudi Arabia
• Qatar
• Oman
• Bahrain
• Kuwait

The UAE is expected to hold a significant share of the GCC Off the Road (OTR) Tire Market in the coming years owing to the UAE's strategic geographic location as a global trade hub, which fosters easy access to international markets and facilitates efficient import and export of OTR tires. Moreover, the UAE's flourishing construction activities in the country are creating immense demand for OTR tires. The UAE government has been granting significant budgets for the construction of new cities as well as public infrastructure. For Instance,

• In 2022, the UAE government approved the country's federal budget of about USD 79 billion for construction activities until 2026.

With the surging construction activities, the demand for OTR tires is surging in the country owing to frequent wear and tear losses in road rollers and other construction equipment. This has created demand for new OTR tires in vehicles, leading manufacturers to provide OTR tires in the country, augmenting market growth & expansion.

Gain a Competitive Edge with Our GCC Off the Road (OTR) Tire Market Report

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2. This report also highlights current market trends & future projections, allowing businesses to identify emerging opportunities & potential challenges. By understanding market forecasts, companies can align their strategies & stay ahead of the competition.
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