The UAE’s tyre market is expected to grow at a compound annual growth rate (CAGR) of over 5 per cent, during 2016 to 2021, on account of expanding sales of automobiles, growing purchasing power of people and expanding vehicle fleet size, according to a  report.

Moreover, constant increase in the number of nuclear families coupled with increasing number of infrastructure projects is projected to boost demand for passenger cars and commercial vehicles and related tyres in the country, stated the report from TechSci Research, a research based global management consulting firm.

Passenger car fleet size in the country stood at 1.96 million units in 2014 and this is projected to increase in the coming years, said the research group in its report entitled "UAE Tire Market Forecast & Opportunities, 2021."

As of 2015, a major share in the demand for tyres in the UAE is emanating from Dubai, Abu Dhabi and Sharjah.

These emirates, which are the economic and commercial centres of the country and house a large population base in the region, are anticipated to continue dominating the UAE tyre market through 2021 as well, it added.

Additionally, although offline channels dominated sales of tyres in the UAE, rising internet penetration rates as well as growing popularity of e-commerce portals in the country is projected to drive sales of tyres in the UAE through online channels.

According to World Bank, internet penetration in the UAE crossed 91.2 per cent in 2015.

Karan Chechi, the research director with TechSci Research, said: "With the increasing infrastructure and commercial projects in the UAE such as World Expo 2020, the country would be able to attract huge foreign investments in construction and infrastructure projects in the coming years."

“The country is anticipated to undergo major infrastructure transformations in energy, communication, transport, water, health and housing sectors across the country. This is projected to boost demand for automobiles and tyres in the country in medium to long term,” he added.-TradeArabia News Service