Market Overview
The tire industry in the UAE is extensive and impacted directly by the automotive sector. Hence, the growing sales of vehicles like Passenger Cars, Light Commercial Vehicles, Buses & Trucks, Economy & Heavy Commercial Vehicles, Off the Road (OTR), & Two Wheelers, among others, in the UAE are positively influencing the demand for tires like Radial & Bias through distribution channels like dealers/exclusive outlets & online platforms. Besides, with the growing competition between prominent tire manufacturing companies across the UAE, tires are now becoming easily available at affordable price categories, ranging from Budget, Economy, to Premium, while exhibiting high performance & excellent driving experiences on different terrains.
Market Insights
The UAE Tire Market is projected to grow at around 3.8% CAGR during the forecast period, i.e., 2022-27. The growth of the market is driven primarily by the burgeoning vehicle sales owing to improving per capita income & living standards, vehicles becoming a status symbol, surging number of private vehicle ownership, and an escalating number of female drivers across the UAE.
| Report Coverage | Details |
|---|---|
| Study Period | Historical Data: 2017-20 |
| Base Year: 2021 | |
| Forecast Period: 2022-27 | |
| CAGR(2022-27) | 3.8% |
| Key Companies Profiled | Continental, Bridgestone, Yokohama, Hankook, Goodyear, Michelin, Kumho, Pirelli, Sumitomo, Toyo |
| Unit Denominations | USD Million/Billion |
In addition, the rising focus of the UAE government toward economic diversification is leading to massive investments in infrastructure developments, which, in turn, is introducing several constructions projects and propelling the demand for heavy commercial vehicles. Hence, the demand for robust tires for these vehicles is escalating swiftly across the country and driving the market.
Besides, the rapidly expanding tourism in the UAE is playing a crucial role in fueling the demand for vehicles for public transportation, along with sports vehicles for adventure & off-roading activities, thereby driving the tire market.
Moreover, escalating migration due to the availability of various job opportunities, coupled with numerous Multi-National Companies (MNCs) being established in the UAE, are infusing the demand for vehicles & boosting the tire market. Furthermore, the active participation of prominent automakers & tire manufacturers in expanding their product portfolio & visibility across the UAE is another crucial aspect projected to augment the overall market growth in the years to come.
Impact of Covid-19 on the UAE Tire Market
The Covid-19 pandemic in 2020 had a decelerating on most industries across the UAE, where the tire industry was no exception. With the imposition of stringent movement restrictions, travel bans, & nationwide lockdown by the UAE government, the tire market witnessed several challenges like disruptions in the supply chain of raw materials, labor shortages, increased demand-supply gaps, delivery delays & cancellations, shut down of manufacturing units, etc. It, in turn, caused massive financial losses to the leading players in the UAE Tire Market.
Additionally, some construction projects remained operational amidst the crisis, owing to which the demand for tires for heavy vehicles soared significantly. Yet, hampered transportation & logistics created challenges in meeting the targets.
However, with the gradually reducing Covid-19 cases, the government uplifted the restrictions and allowed the recommencement of market operations. As a result, the leading players increased their production capabilities to meet the burgeoning tire demand across the country while introducing new product lines to expand their visibility & contribute to the recovery of the usual market growth pace.
Market Segmentation
Based on Type of Vehicle:
Here, Passenger cars dominated the UAE Tire Market with the largest share in recent years. It attributes principally to the increasing establishment of prominent automakers & tire manufacturers across the UAE, coupled with their active participation in the market with the introduction of new vehicles & tire models, to expand their product portfolio & visibility across the country and boost the tire industry during the forecast period.
In addition, the easy availability & low prices of Chinese tires has led to the growing sales of passenger vehicle tires across the country. The high income & changing living standards of people in the UAE is projecting escalating ownership of vehicles, which, in turn, would boost the sales of passenger cars and positively affect the UAE Tire Market through 2027.
Based on Type of Tire:
Of both, Radial Tires acquired the largest share of the UAE Tire Market, and the same trend is likely to be followed over the forecast years. It owes to their benefits like robust grip, better vehicle control, excellent durability & load capacity, vehicle stability, & enhanced fuel efficiency, among others.
Besides, with the growing number of construction activities in the country, the demand for heavy vehicles is rising substantially. It, in turn, is fueling the demand for Off-the-Road (OTR) radial tires, which, as a result, would augment the market growth in the coming years.
Based on Demand Category:
Of both, OEM (Original Equipment Manufacturer) acquired the lion's share of the UAE Tire Market in recent years. It was principally due to the rapid establishment of prominent automakers & tire manufacturers across the UAE and their massive production of automobiles & tires in the country, displaying an extensive availability of products at OEMs. Besides, the growing number of OEMs of prominent companies is also for expanding the product portfolio & visibility across the country.
Based on Sales Channel:
Here, Online sales channels are anticipated to gain significant momentum in the UAE Tire Market over the forecast years, principally due to the rapid inclination of consumers toward digital platforms as a primary store for purchasing goods owing to ease of access and hassle-free deliveries.
Market Dynamics:
Key Driver: Stringent Safety Regulations by the UAE Government for Vehicle & Tire Maintenance
Since the number of road accidents is rising at a concerning rate, the government of the UAE is imposing stringent regulations for vehicles owners to timely inspect the condition of their vehicles & tires and provide necessary them with replacements whenever required. These measures are principally to reduce & eliminate the possibilities of accidents in the future, which, in turn, would fuel the sales of tires and drive the UAE Tire Market in the coming years.
Possible Restraint: Alarming Environmental Concerns over the Use of Rubber Tires
Rubber, the base material used for tire production, is a prominent contributor to environmental degradation. Due to this, the UAE government has laid out stringent restrictions to curb the adverse effects. When tires are burnt, they produce harmful acid smoke & leave behind an oily residue. Additionally, these fires are not extinguishable and may continue burning for several weeks. Hence, the massive tire production & disposal of rubber tires as waste might restrain the growth of the UAE Tire Market in the coming years.
Growth Opportunity: Rapidly Expanding Online Platforms across the UAE
The Covid-19 pandemic has resulted in a crucial role of online platforms in the supply of goods across different locations. As a result, several tire manufacturers are increasingly adopting this digital transformation and providing customers with dedicated online platforms to buy tires. It, in turn, is generating lucrative opportunities for the leading players to expand their product portfolio & visibility across the country and contribute to the overall expansion of the UAE Tire Market in the coming years.
Key Questions Answered in the Market Research Report:
Frequently Asked Questions
A. The UAE Tire Market is expecting around 3.8% CAGR during the forecast period, i.e., 2022-27.
A. Radial Tires are anticipated to emerge as an area of remunerative opportunities for the leading players in the UAE Tire Market during 2022-27.
A. Stringent safety regulations by the UAE government for vehicles & passengers entwined with the swiftly expanding online platforms for tires are the key growth opportunities projected to drive the UAE Tire Market through 2027.
A. In the coming years, the UAE Tire Market is projected to witness steady growth since prominent market players are introducing new product lines and actively increasing their production capacities to meet the burgeoning tire requirements across the UAE.
