KSA Tire Market Is Estimated To Witness High Growth Owing to...

KSA Tire Market Is Estimated To Witness High Growth Owing to Increasing Vehicle Sales and Government Initiatives

Posted 2023-08-22 06:26:04

A) Market Overview:
The Saudi Arabia Tire Market is estimated to be valued at US$3,431 million in 2021 and is expected to exhibit a CAGR of 11.8% over the forecast period (2021-2028), as highlighted in a new report published by Coherent Market Insights. The market caters to the demand for tires in various sectors, including passenger cars, commercial vehicles, and off-road vehicles. These tires provide safety, improved traction, and fuel efficiency, enhancing the overall performance of vehicles.

B) Market Dynamics:
The Saudi Arabia Tire Market is driven by two significant factors: increasing vehicle sales and government initiatives.

1. Driver 1: Increasing Vehicle Sales
Saudi Arabia has witnessed a significant surge in vehicle sales in recent years. The growing population, rising disposable income, and improving standards of living have contributed to the increased demand for automobiles, subsequently driving the demand for tires. The expanding tourism and logistics sectors have further boosted the requirement for commercial vehicles, leading to a steady growth in tire sales.

2. Driver 2: Government Initiatives
The Saudi Arabian government has implemented various initiatives to promote the automotive industry, including the National Industrial Development and Logistics Program and the Vision 2030 plan. These initiatives aim to increase domestic manufacturing, enhance economic diversification, and attract foreign investments. Such efforts have led to the establishment of new automotive manufacturing facilities in the country, creating a favorable market for tire manufacturers.

C) SWOT Analysis:
- Strengths:
1. Increasing Vehicle Sales: The rising demand for automobiles in Saudi Arabia presents a growth opportunity for tire manufacturers.
2. Government Support: The government's initiatives to boost the automotive industry provide a conducive environment for the tire market to flourish.

- Weaknesses:
1. Dependency on Imported Tires: Saudi Arabia relies heavily on imported tires, which poses challenges in terms of pricing and availability.
2. Regional Competition: The presence of international tire companies in the market creates competition for local manufacturers.

- Opportunities:
1. Increasing Tire Replacement Demand: As the average age of vehicles in Saudi Arabia increases, the demand for tire replacements is expected to rise.
2. Shift towards Green Tires: The growing focus on environmental sustainability opens avenues for the development and adoption of eco-friendly tires.

- Threats:
1. Volatile Raw Material Prices: Fluctuations in the prices of raw materials used for tire production can impact profit margins.
2. Counterfeit Products: The prevalence of counterfeit tires in the market poses a threat to consumer safety and the reputation of genuine tire manufacturers.

D) Key Takeaways:
- The KSA Tire Market Insights is expected to witness high growth, exhibiting a CAGR of 11.8% over the forecast period, due to increasing vehicle sales and government initiatives.
- Regional Analysis: Saudi Arabia is expected to be the dominating region in the tire market, driven by the growing automotive industry and infrastructure development in the country.
- Key Players: The key players operating in the Saudi Arabia Tire Market include 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.

The Tire Market is poised for substantial growth due to the increasing vehicle sales and government initiatives fostering the automotive industry. As the market expands, tire manufacturers have the opportunity to capitalize on the growing demand by offering innovative and sustainable tire solutions.