Saudi Arabia Tire Market Research Report Forecast: (2022-2027)
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||
Hankook, Bridgestone, Goodyear, Michelin, Continental, Nexen, Toyo, Kumho, Apollo, Others
|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.
Based on the Type of Vehicle:
Of all types of vehicles, passenger cars are projected to dominate the Saudi Arabia Tire Market with the largest share during 2022-27. It owes principally to the improving economic conditions & greater inclination of people toward private ownership of vehicles, i.e., demonstrating rapid growth in the passenger car fleet and, consequently, mounting demand for tires.
Besides, as Saudi Arabia is one of the cheapest countries to buy vehicles, owing to the absence of Luxury Tax or VAT, it is generating lucrative prospects for automakers & tire manufacturers to introduce new models & versions. Hence, the country represents a big market for passenger car & their tires, which cites profitable growth prospects for the tire market through 2027.
Based on the Type of Tire:
Here, Radial Tires are anticipated to prominently contribute to the market growth for tires in Saudi Arabia through 2027. It owes to various ongoing & upcoming construction projects for infrastructural development & economic diversification of the country away from the oil & gas sector, i.e., augmenting the production of various construction equipment & commercial vehicles.
It, in turn, is driving the demand for radial tires for their greater fuel efficiency, massive load capacity, lower rolling resistance, improved traction, and exceptional operational efficiency in different construction activities. In addition, benefits like stable road contact & flexible sidewalls are also complementing the growing popularity of radial tires and, in turn, fueling the growth of the Saudi Arabia Tire Market.
Key Driver: Surging Inclination of Tire Manufacturers toward Digital Sales Platforms
The increasing government support for digital transformations across industries, i.e., enabling the leading tire manufacturers to adopt online platforms for tire sales, is allowing the customers to choose from a wide variety of tires of different brands, budgets, features, etc., and avail benefits like discounts, door-step deliveries & installation, among others. This rapidly increasing digital transformation of tire manufacturers is the key factor projected to drive the Saudi Arabia Tire Market during 2022-27.
Possible Restraint: Stringent Regulation on the Sales or Import of Used Tires
As used tires are more likely to cause accidents, the government of Saudi Arabia has imposed stringent restrictions on their imports or sales. Besides, these tires pose a high risk of causing fire & emitting toxic fumes that are dangerous to human health. Hence, these restrictions by the governments might restrain the growth of the Saudi Arabia Tire Market in the coming years.
Key Questions Answered in the Market Research Report:
Frequently Asked Questions
A. The Saudi Arabia Tire Market is projected to grow at a CAGR of around 8% during 2022-27.
A. Leading players making a paradigm shift to online platforms and allowing the customers to choose tires from a wide variety and different brands & budgets is the major factor likely to drive the Saudi Arabia Tire Market through 2027. On the other hand, stringent restrictions imposed by the government on the import or sales of used tires might hinder the market expansion of tires across Saudi Arabia over the forecast years.
A. Passenger cars are anticipated to emerge as an area of remunerative opportunities for the leading players in the Saudi Arabia Tire Market over the forecast years.