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Posted in Automobile by Adolf on Dec 20,2021 1644
The Kingdom of Saudi Arabia is considered as one of the largest automotive markets in the Middle East. In fact the industry is the main pillar of the global economy. Possessing the largest auto and auto parts market, the country has accounted for over 30% of all the vehicles sold in the region. Additionally, the Saudi Arabian government is also looking to develop the domestic automotive industries and is encouraging global vehicle manufacturers to establish local operations, which would further drive the Saudi Arabia passenger car market in the coming years.
The growing demand for passenger cars is backed by rising per capita income, improving road infrastructure, increasing completely knocked down (CKD) plants, etc. Also, rising demand for passenger cars coupled with an expected increase in the average selling price of the vehicles is expected to drive the market value of passenger cars in Saudi Arabia over the forecast period.
Moreover, the removal of ban and growing preference for women drivers has uplifted the passenger car market in Saudi Arabia. Changes in the government norms for females driving automotive vehicles after decades has resulted in the growth of women drivers. Besides, opting for self-driving gives many women a sense of empowerment.
Therefore, many women are hitting the Saudi roads with four-wheelers and several women with foreign licenses have already obtained Saudi driving licenses. Relatively, many of the women are learning to drive. All the above factors are expected to increase the sales of passenger cars in Saudi Arabia, which in turn is further going to boost the passenger car Tire Market in Saudi Arabia.
Numbering the Market Size of the Saudi Arabia Tire Market
The Saudi Arabia Tire Market stood at US$2.07 billion in 2020 and it is forecast to grow at a CAGR of over 5.30% and cross US$2.74 billion by 2026, on account of expanding vehicle fleet size, rising purchasing power and growing infrastructure and construction sector in the country.
Moreover, the development of smart cities such as ‘Neom’ and implementation of programs such as National Industrial Development and Logistics Program (NIDLP) to facilitate the Saudi Vision 2030 are further driving the growth of Saudi Arabia Tire Market. Additionally, short replacement period of tires due to extreme weather conditions in Saudi Arabia along with improving economic conditions are expected to further push the demand for tires in the country during the forecast period.
The Saudi Arabia Tire Market is segmented on the basis of vehicle type, tire construction type, sales channel, and region. Based on vehicle type, the market is further segregated into passenger car, LCV, M&HCV, OTR, and two-wheeler. Among them, the passenger car segment dominated the market in the historical period and the trend is expected to continue in the forecast period as well.
Major companies are adopting strategies such as expansion in new locations, mergers & acquisitions and product developments. With rising focus of these leading players on sales and marketing activities, the automobile industry in Saudi Arabia is anticipated to witness intensifying competition in the coming years.
One of the major trends witnessed in the market is the growing popularity of tire retreading, especially in OTR tires. OTR tire market in Saudi Arabia accounts for the highest share of overall retread tire market in the country. Furthermore, increasing focus on technological advancement is another major trend observed in the market.
Tire manufacturers are increasingly focusing on developing and manufacturing high-tech tires for automobiles in Saudi Arabia. To meet evolving customer demand with respect to better ride comfort, safety, higher fuel efficiency and durability, several tire manufacturers are coming up with their technologically advanced new tire offerings.
Moreover, the shift towards online tire sales is another trend witnessed in the market. Increase in e-commerce and online sales are beneficial for the consumers as it allows them to make better product choices. Customers get time to compare various brands of tires, while also looking into prices, quality and specifications of the related products. The online platform also cuts the overhead expenses and time that customers would incur while opting for the traditional style of buying tires.