KSA Tire Market Expected to Reach Value of USD 2,123 Million in 2016

The prospects for the Saudi tire market are really bright mainly due to the high demand for four wheel vehicles. A report prepared by Persistent Market Research projects that the tire market in the kingdom will gain revenues of USD 2.12 billion by the end of 2016. Driven by the demand for SUVs, the market is expected to experience an astounding level of growth with a CAGR of 10.8 per cent in the period up to 2026.

The soaring temperatures in the country is the main factor that has led to growing demand for four wheeler vehicles. Another factor is the generous taxation policy of the Saudi government which has driven costs down even for larger vehicles. The growing inclination among motorists to buy top-end luxury cars and the preference for OEMs is expected to lead to growth in the market in the long run. Factors which may restrict the growth of the tire market in the kingdom are the implementation of strict import standards by SASO and tightening of regulatory norms with regard to sale of used tires.

An analysis by vehicle type revealed that four wheeler vehicles continue to be the most prominent segment, and accounted for over USD 1.43 Billion in total market revenues in 2016. Within this segment, passenger cars have the potential for maximum growth, due to the growth in demand for passenger cars and light trucks. Commercial cars meanwhile have the second largest market position.

When it comes to product type, both pneumatic and non-pneumatic tire segments are projected to experience strong sales, due to increasing R&D initiatives by manufacturers. The introduction of online tire sale is expected to garner significant revenue share in the KSA tire market.

When compared to other provinces in the country, the Western and Central Provinces of Saudi Arabia are anticipated to record the maximum consumption of four wheeler tires as they expected to experience significant growth during the period covered in the report. The sale of tires at the retail level will be highly concentrated in the key cities of Riyadh and Mecca, which will account for over 80% of total sales.

The major players in the KSA tire market include Continental AG, The Bridgestone Group, Michelin Group, and Pirelli & C Spa and they are expected to become even stronger in the coming years. They will face strong competition from other tire manufacturers like Yokohama Rubber Company Ltd, Apollo Tyres Ltd., and Goodyear Tire & Rubber Company.