The Growing Transportation Industry Is Anticipated To Open Up The New Avenue For KSA Tire Market
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| KSA Tire Market |
The KSA Tire Market is estimated to be valued at US$ 4288.49 Mn or in 2023 and is expected to exhibit a CAGR of 11.% over the forecast period 2023 to 2030, as highlighted in a new report published by Coherent Market Insights.
Market Overview:
Tires are essential component of automobiles such as cars, buses, trucks, construction vehicles etc. They provide traction between the road and vehicle and act as shock absorbers. The key types of tires available in the market are radial tires and bias tires. Radial tires account for around 85% of tire sales in KSA due to their better ride quality and fuel efficiency compared to bias tires. They find widespread application in passenger cars, light commercial vehicles and trucks. Some of the prominent tire brands present in the country are Michelin, Goodyear, Bridgestone, Pirelli etc.
Market Dynamics:
Growing vehicle parc is one of the major drivers of the KSA tire market. According to Saudi traffic department, the total number of registered vehicles in the country grew from around 15 million in 2017 to over 20 million in 2021. This rising number of on-road vehicles is creating steady demand for replacement tires. Moreover, increasing transportation of goods within KSA and across borders is propelling the demand for commercial vehicle tires from logistics companies. Expanding road infrastructure under the Vision 2030 program will further fuel the growth of commercial fleets. The government is constructing thousands of kilometers of new highways and roads, which is raising the replacement rate of tires used in trucks and buses. Another factor promoting market expansion is resurgence of tourism activity post pandemic. With mega projects like Qiddiya and Red Sea coming up, international tourist arrivals are projected to surge in the coming years positively impacting tire sales.
Segment Analysis
The KSA tire market is dominated by the replacement segment which holds around 75% of the overall market share. Being one of the fast growing automotive markets, KSA has a vehicle parc of over 18 million and growing at a rate of around 5% annually which is resulting in strong demand for replacement tires. The average life of a tire in KSA is less than 3 years due to high mileage and extreme weather conditions which is benefitting the replacement segment.
PEST Analysis
Political: The governmental focus on infrastructure development and Make in KSA initiative to localize tire production is positively impacting the market.
Economic: Strong GDP growth of over 3% annually, low unemployment and rising disposable income is increasing consumer spending on vehicles and tires.
Social: Increased urbanization, youth population and rising affinity towards luxury vehicles is driving the replacement cycle and demand for high performance tires.
Technological: Development of fuel efficient, long lasting and all season tires suited for local climatic conditions is a key focus area for major players.
Key Takeaways
Global KSA Tire Market Size is expected to witness high growth at a CAGR of 11% over the forecast period due to increasing vehicle parc and average annual mileage in the country. The replacement segment dominates the market and is expected to grow further owing to shorter replacement cycles.
Regionally, Western region accounted for around 35% value share in 2023 led by major cities like Jeddah, Makkah and Madinah. Eastern region is projected to witness fastest growth due to ongoing industrialization and transportation projects under Vision 2030.
Key players operating in the KSA tire market are The Bridgestone Group, Hankook Tire Company, Apollo Tires Ltd., Michelin Group, Toyo Tire & Rubber Company Ltd., Goodyear Tire and Rubber Company, Yokohama Rubber Company Ltd., Pirelli & C SpA Company, Cooper Tire & Rubber Company, and Continental AG. Major players are focusing on capacity additions, product innovation and lucrative partnerships to leverage opportunities in the rapidly growing market.
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