Dubai, the largest Middle Eastern hub for multi billion trade in tyres

The direct trade in tyres for commercial and passenger cars in Dubai is valued at more than Dhs6.6bn ($1.8bn) for 2008. Even with the economic downturn catching up, wheels of the tyre market in the UAE are set to keep turn-ing in 2009.

The profitable movement will be underscored at Automechanika Middle East, the largest event for the rapidly developing automotive aftermarket in the wider Middle East and Africa; scheduled to open from 31st May - 2nd June, 2009, at the Dubai International Convention and Exhibition Centre.

"Tyres worth Dhs4.4bn ($1.2bn) for passenger cars, buses and lorries were imported to Dubai in 2008. 45% of the total tyres imported were from Japan, worth Dhs1.97bn ($535m), while imports of Chinese tyres stands at 20% or Dhs864m ($235m)," noted Mr. Michael Dehn, Senior Show Manager of Automechanika Middle East.

"Out of the total imports Dubai consumes nearly 50%, re-exporting tyres worth Dhs2.2bn ($600m) to Iran, Iraq, Kuwait, Saudi Arabia, Africa, other neighboring countries, and even to Netherlands, UK and Hong Kong," added Mr. Dehn.

Dubai is a transport-oriented city; with one car for every 1.84 residents, and an average vehicle occupancy rate of 1.7. In 2008 it had the highest rate of car ownership than any other city in the world.

The absence of automotive manufacturing industries results in most of the vehicles and automotive parts being imported for domestic use and re-exports to other countries.

New car sales in the UAE has cratered amid the economic downturn, however, there is still a clear stability in the auto aftermarket and re-placement industry. The tyre industry is an attractive segment, with al-most 75% of the total tyre production intended for the replacement market and the rest taken up by vehicle manufacturers.

As a lucrative market for other countries' exports, Dubai's potential is larger than its size would indicate. A thriving re-exports trade market increases the demand; a large percentage of tyres imported into Dubai are for redistribution to neighboring markets.

The positive trend for the Tyre industry is not just limited to the UAE, but the entire Middle East is characterized by a diverse structure of economies, climates and transport conditions. The lack of railway con-nections in the Arabian Peninsula forces most of the overland-transport on the road, making it a high-volume sales territory for tyre manufactur-ers.

Automechanika Middle East is an ideal platform for tyre related busi-ness. Tyre wholesalers and dealers represented the third biggest visitor group at the 2008 Automechanika Middle East exhibition, clearly de-monstrating the vast business opportunities.

Dubai is strategically located midway between the Far East and Europe on the east-west trading routes, and between the former Soviet Union and Africa on the north-south axis.