Saudi Arabian tyre mkt to grow CAGR of 10.8% in next decade
On the favourable government regulations and rising demand for passenger cars, the Saudi Arabian tyre market is expected to grow at a compound annual growth rate (CAGR) of 10.8 % during 2016-2026 and to reach the value of $2.12 billion at the end of 2016, says a report, titled Kingdom of Saudi Arabia (KSA) Market Study on Tire: Industry Analysis and Forecast, 2016–2026 by Persistence Market Research.
The lower number of luxury or value-added tax on the purchase of commodities in the region is a major driver as increasing number of people are opting for cars, including passenger cars as well as luxury cars due to high temperatures recorded round the year, said the report. Consumer preference towards original equipment manufacturer (OEM) channels is expected to boost sales. On the other hand, stringent regulations in regard to used tyres and import standards by the Saudi Arabia Standard Organization (SASO) is expected to be a major restraint in the market, it added.
In terms of product type, the market is segmented into pneumatic and non-pneumatic tyres which are expected to see a rise in demand on rising research and development by tyre companies . Rising research and development by the manufacturers is expected to fuel the demand for both product segments in the Saudi Arabian tyre market. In terms of vehicle type, the market is segmented into two wheeler, four wheeler, aircraft, and others. Four wheeler segment is further sub-segmented into passenger car, commercial car, and others.
The four wheeler segment is projected to continue leading the market through the forecast period. The passenger car sub-segment is the most prominent sub-segment in the market and is expected to continue the market trend, accounting for over $1.43 billion at the end of 2016, added the report.
In terms of region, the market is segmented into East Province, West Province, Central Province, South Province, and North Province. The Western and Central Provinces are expected to grow the fastest in terms of demand for four wheeler tires. Provincial cities of Riyadh and Makkah are projected to develop as concentrated hubs of tire retail outlets in Saudi Arabia, it said.
Major players in the kingdom’s tyre market include Pirelli & C Spa, Yokohama Rubber Company Ltd, Apollo Tyres Ltd, Toyo Tire & Rubber Company Ltd, The Bridgestone Group, Hankook Tire Company, Continental AG, Cooper tire & Rubber Company, Goodyear Tire and Rubber Company, and Michelin Group. Prominent global players such as The Bridgestone Group, Michelin Group, Pirelli & C Spa, and Continental AG are expected to continue their dominance in the Saudi Arabian tyre market. Apollo Tyres Ltd, Goodyear Tire & Rubber Company, and Yokohama Rubber Company Ltd are expected to provide stiff competition to the major players with cost-efficient options, it stated.