Saudi Arabia Tire Market Thriving: Growing at a CAGR of 6.0% in the Forecast Period (2021-2027)
Published | 14 September 2021
Saudi Arabia tire market is growing at a high CAGR because of the growing demand for automobiles in the country and the high purchasing power of customers, along with increasing demand for maintenance services for vehicles for safety purposes...
A recent study conducted by the strategic consulting and market research firm, BlueWeave Consulting, revealed that Saudi Arabia tire market was worth USD 3.8 billion in the year 2020. According to the study, the market is estimated to grow at a CAGR of 6.0%, earning revenue of around USD 5.6 billion by the end of 2027. Saudi Arabia tire market is gaining significant traction because of driving factors such as the growing demand for automobiles in the country and the high purchasing power of customers. Furthermore, the increasing demand for maintenance services for vehicles for safety purposes and replacement of tires to prevent wear and tear and accidents is also propelling Saudi Arabia’s tire market demand. However, the high cost of tires may limit the market growth up to some extent.
Growing Demand for Passenger Vehicles Is Driving Saudi Arabia Tire Market Growth
The growing demand for passenger vehicles for personal use is on a significant rise due to the increasing purchasing power of the people. This factor is significantly propelling the demand for tires in Saudi Arabia as well. Despite Saudi Arabia's well-developed public transport system, its chain is restricted to densely populated areas, public facilities, and commercial and educational institutions. As a result, the demand for passenger vehicles for personal mobility needs is propelling the demand for tires across the country.
Saudi Arabia Tire Market - By End-Use
Based on end-use,Saudi Arabia tire market is segmented into OEM and replacement. The OEM segment accounts for the largest market share with four major global OEMs, i.e., Isuzu Motors, Mercedes, Man, and Volvo, etc. These OEMs with a combined production capacity of around 12,000 heavy-duty vehicles will likely grow and reach about 39,000 by 2022. These production activities are propelling the demand for tires among OEMs, further propelling the market growth. On the other hand, the replacement segment also has a significant market share because of the safety aspect associated with a tire's health. Car owners spend heavily on regular maintenance and services of their cars and make necessary replacements if required. Due to this, the demand for tires is high and growing at an increasing rate in Saudi Arabia market.
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Impact of COVID-19 on Saudi Arabia Tire Market
The sudden outbreak of the COVID-19 and the global pandemic negatively impacted Saudi Arabia tire market. The import and export of vehicles temporarily ceased, resulting in a shorter supply of tires as well. Additionally, the production activities of OEMs having their operations in Saudi Arabia also remained restricted owing to lockdown restrictions. The demand for tires in the country declined significantly, incurring losses to the market. Furthermore, tire markets in Saudi Arabia also faced a slump from lower wear and tear due to restricted mobility. The demand for maintenance services and tire replacement decreased significantly, resulting in severe losses for tire dealers. However, due to the rapid emergence of online tires purchasing and selling platforms, the market is expected to recover soon. The manufacturers and dealers now manage their stock and fulfill the supply of tires through online mediums and offer door-step deliveries, which is likely to boost the market growth in the post-COVID-19 period.
The leading players in Saudi Arabia tire market are Michelin, Bridgestone, Continental, Goodyear, Sumitomo, Pirelli, Yokohama, Cooper Tyre& Rubber Company, Apollo Tyres Ltd, Dunlop, Compagnie Generale des Établissements Michelin SCA,Hankook, Toyo, Kumho, and other prominent players.
Saudi Arabia tire market is highly fragmented and consolidated with leading global and regional players. Considering the great potential in the Saudi Arabia market, several leading tire companies are launching their products to exploit the opportunities. The companies offer a wide range of tires of different materials and sizes to meet the growing demand for multiple vehicles.
The adoption of competitive strategies like mergers, acquisitions, partnerships, etc., is also very prominent in this market. Many regional tire manufacturing businesses are forming strategic partnerships and collaborations with multinational players in order to extend their product portfolios, resulting in product premiumization. The companies are also significantly investing in research & development activities for improving and advancing their products such as ecological, flat-run, nitrogen-based tires to gain a competitive edge and a larger share in the market.
The in-depth analysis of the report provides information about growth potential, upcoming trends, and statistics of the Saudi Arabia tire market. It also highlights the factors driving forecasts of total market size. The report promises to provide recent technology trends of the Saudi Arabia tire market and industry insights to help decision-makers make sound strategic decisions. Furthermore, the report also analyses the growth drivers, challenges, and competitive dynamics of the market.
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