global economic decline – Tires & Parts News https://tiresandparts.net Your News Source for Everything Automotive Thu, 29 Oct 2020 08:33:47 +0000 en-US hourly 1 https://wordpress.org/?v=5.0.11 Middle East tyre market shows resilience in the face of global economic decline https://tiresandparts.net/news/middle-east-tyre-market-shows-resilience-in-the-face-of-global-economic-decline/ https://tiresandparts.net/news/middle-east-tyre-market-shows-resilience-in-the-face-of-global-economic-decline/#respond Wed, 15 Jul 2020 14:13:31 +0000 https://tiresandparts.net/?p=31201 Despite the knock-on economic effect COVID-19 has had on the automotive industry, the market for passenger and commercial tyres in the Middle East has shown resilience and will see a positive recovery over the next five years. While forecasted figures for 2020 have seen a significant decrease (reduced from 55.55 to 48.88 million units), the […]

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Despite the knock-on economic effect COVID-19 has had on the automotive industry, the market for passenger and commercial tyres in the Middle East has shown resilience and will see a positive recovery over the next five years.

While forecasted figures for 2020 have seen a significant decrease (reduced from 55.55 to 48.88 million units), the expected growth of the market is still set to swell by 5.04% (CAGR) – topping 62.64 million units – by 2025.

These figures come to light in the latest revision of the ‘Middle East and Africa Tire Market’, a forecast originally published by management consulting firm TechSci Research in April. Amended in June, it takes into consideration the pandemic’s economic impact on the second half of 2020.

Karan Chechi, Research Director at TechSci Research, said: “Traditionally, the aftermarket has always been more resilient than the automotive industry in tough times. Our current situation is no different. Tyres are still the largest segment for spare parts in the region and, although growth has been stagnated in 2020, we will still see it recover at a healthy rate as countries get back to business.

The Middle East and Africa Tire Market report was commissioned by Messe Frankfurt Middle East ahead of this year’s Automechanika Dubai, the largest international trade show for the automotive aftermarket and service industry in the MEA region. The three-day trade show will take place from 19-21 October at Dubai World Trade Centre (DWTC).

“With businesses in countries effectively dialling back on lockdown and work from home measures, the market drivers and challenges will largely remain the same, albeit with the addition of a couple of points for either side,” Chechi added.

The construction sector has played a large part in creating the demand for commercial tyres pre-COVID. While the demand has decreased by 1.57 million units compared to April’s forecast, it will recover to 14.06 million units by 2025 (4.15%CAGR).

“From JCBs and diggers used onsite to heavy-duty transport buses for labourers, commercial vehicles have and always will be an integral part of the construction process,” said Chechi. “Maintaining these vehicles, which includes regular tyre checks and replacements, is essential for the health and safety of employees working on a project.

“As the region gets back on track for its large-scale projects, notably the Expo site in Dubai and Neom in Saudi Arabia, it will come as no surprise that it will continue to drive demand.”

Considering COVID-19’s impact on industries across the globe, this year’s edition will put a sharp focus on recovery opportunities for the aftermarket. With the sale of passenger vehicle tyres predicted to rise by 11.17 million units (5.31% CAGR), local garages and car maintenance workshops are looking to carve out a piece of a growing market.

“Ultimately what’s been made clear by the COVID-19 pandemic is while the region’s demand for automobiles is fuelled by an increasing population and an emerging e-commerce and logistics markets, the pace can quite easily be dampened,” said Mahmut Gazi Bilikozen, Automechanika Dubai Show Director for organiser Messe Frankfurt Middle East. “The region relies heavily on imports and any disruption to the chain of supply can have a dramatic impact on unit stockpiles.

“Regional suppliers need to take note of the current effect on supply. To safeguard bottom lines, contingency plans should be put together for situations that interfere with global markets.”

More information is available at Automechanika Dubai

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