Saudi Arabia tyre market to follow vehicle market expansion
In 2013, about 0.74 million units of commercial vehicles and passenger cars were sold in Saudi Arabia, giving the Kingdom one of the highest per capita vehicle totals globally. However, virtually all of this is imported as Saudi Arabia is also home to a huge vehicle production deficit. Nevertheless, a new report distributed by Bharat books suggests expanding growth potential in the automobile sector is attracting several vehicle manufacturers to Saudi Arabia.
For example, Japanese car maker Isuzu has constructed a production facility in Dammam Industrial City 2 and plans to manufacture about 25,000 light trucks and heavy duty trucks by 2017, primarily to address swelling domestic as well as exports demand from the MENA region. This is expected to considerably boost OEM tyre sales in the country over the next five years.
According to “Saudi Arabia Tyre Market Forecast & Opportunities, 2019”, the tyre market in Saudi Arabia is forecast to grow at a compound annual growth rate (CAGR) of around 17 per cent between now and 2019. The 17 per cent figure is some 5 percentage points higher than the 12 per cent mark suggested by Bharat Book’s last report on the subject, which was published just over a year ago. Increasing passenger car sales, expanding automobile fleet size, favourable government policies and significant foreign investments in the automotive sector are some of the key factors propelling tyre demand in Saudi.
Due to extreme weather conditions, replacement period for tyres is relatively short, which is also a major reason for increasing replacement tyre sales in the Kingdom. The passenger car tyre sector is said to be the most dominating segment in the Saudi tyre market, followed by commercial vehicle tyres and other vehicle tyre segments.
The Kingdom’s Western and Central regions, comprising Riyadh, Mecca and Madinah, collectively account for around 57 per cent of the total tyre sales in Saudi Arabia, according to the new report.
Besides major Chinese brands, some leading tyre manufacturers like Bridgestone, Michelin, Continental, Goodyear and Yokohama have established themselves in the Saudi Arabia tyre market.
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