As private ownership of vehicles is becoming more of a necessity than a luxury today, vehicle sales are rapidly rising and, in turn, augmenting the production of robust tires. However, people across Saudi Arabia see cars as a status symbol. As a result, the vehicle fleet is likely to rise at a notable pace in the country and portray remunerative prospects for the tire industry over the coming years.
The Saudi Arabia Tire Market is projected to grow at a CAGR of around 8% during the forecast period, i.e., 2022-27. The growth of the market is likely to be driven primarily by the rapidly growing vehicle fleet due to the rising per capita income of people & their mounting inclination toward private ownership of vehicles across Saudi Arabia. It, in turn, is directly influencing the demand for tires and stimulating the overall market growth.
|Study Period||Historical Data: 2017-20|
|Base Year: 2021|
|Forecast Period: 2022-27|
|Region Covered||East, West, South, Central|
|Key Companies Profiled||
|Unit Denominations||USD Million/Billion|
In addition, the soaring government focus on infrastructural development to diversify the economy away from oil in line with the strategic plan Saudi Vision 2030 is leading to various ongoing & upcoming construction projects throughout the country. It, in turn, is infusing the requirement for different commercial vehicles for multiple applications & boosting the demand for tires.
Besides, the government is also investing substantially and laying out favorable policies to attract foreign investments in setting up tire manufacturing facilities in the country and expand the automotive & tire sectors through 2027.
Moreover, the increasing population & influx of tourists, pilgrims, & migrants in Saudi Arabia is instigating the need for an extensive commercial sector, which has flooded the construction of airports, shopping malls, hotels, restaurants, etc. As a result, the demand for construction equipment & their robust tires is surging at a phenomenon pace.
On the other hand, the country also aims to build smart cities under its NEOM project and the National Industrial Development & Logistics Program (NIDLP), which shall also contribute to the expansion of the tire industry in the country. Furthermore, since there is a prominent volume of tire imports into the country due to the absence of manufacturing facilities, the penetration of international tire brands providing high quality & durable tires is escalating across Saudi Arabia and fueling the overall market growth.
Impact of Covid-19 on the Saudi Arabia Tire Market
In 2020, the automotive & tire industries witnessed severe impacts of the Covid-19 pandemic and introduced several unprecedented challenges for the leading tire manufacturers in Saudi Arabia. With the imposition of lockdown & strict movement restrictions, tire manufacturers & importers faced massive revenue losses due to a shortage of raw materials, supply chain disruptions, delivery & production delays, & price fluctuations amidst the crisis.
The government of Saudi Arabia didn't put any restrictions on construction activities since they are a prominent source of economic fluidity across the country. It, in turn, propelled the demand for commercial vehicles & tires and enabled the leading players to sustain in the market.
Furthermore, as Covid-19 cases started declining gradually, the government uplifted the restrictions & allowed the recommencement of industrial operations. It enabled the leading players to resume their usual production to cater to the varied end-user requirements. Furthermore, most tire manufacturers adopted online platforms to sell their products via e-commerce websites and offer door-step delivery & installation services to their customers, which further boosted the tire industry amidst the crisis.