A tire is a ring-shaped part of the wheel that surrounds its rim. It transfers the vehicle’s load from the axle via the wheel to the ground and provides adequate traction on the surface traveled. Majority of tires used in automobiles and bicycles are pneumatically inflated structures that provide flexible cushion, in order to absorb shock as the tire rolls over. Furthermore, a tire provides a footmark, which is intended to match the weight of the vehicle. The modern pneumatic tires are manufactured from fabric, natural rubber, synthetic rubber, and wire along with carbon black and other chemical compounds. The non-pneumatic tires are made from solid rubber and plastic compounds and are not supported by air pressure.
Market Statistics:
The KSA tire market is expected to surpass US$ 7,494.4 Mn in terms of value by the end of 2028.
Market Driver
Increasing adoption of biolsoprene technology is expected to drive growth of the KSA tire market during the forecast period. On average, seven gallons of oil are required to make one synthetic rubber tire (15–21 inches). Since oil is a non-renewable source of energy, various governments across the globe have started imposing stringent restrictions regarding the use of oil for tire production. Biolsoprene technology is a bio-based alternative technology that utilizes alternative renewable raw materials for manufacturing of synthetic rubber. It has the potential to replace petro-chemically produced products in the synthetic rubber manufacturing process.
Market Opportunity
Increasing number of racing events in the country is expected to present lucrative business opportunities. On an average, a racing car requires 9 to 14 sets of tires in a racing championship circuit event. Every year, Saudi Arabia hosts a plethora of motor racing events. Moreover, the region has seven car clubs namely Porsche Club, Jeddah; Saudi Corvette Club; Mustang Club; Club 63; Lamborghini Club; Jeddah Jeepers; and Hyundai Sports Car Club. Various participants from across the globe participate in these events. Thus increasing number of racing events is expected to boost the demand for tires in the region.
KSA Tire Market: Recent Developments
- In December 2019, Apollo Tyres Limited, an Indian Multinational tyre manufacturing company collaborated with Al-Jomaih Tyres Company to expands global footprint into Saudi Arabia.
- In February 2019, German Tire and Technology Company, Continental has opened an office in Jeddah with an eye on strengthening its foothold in the Middle East. The new office, set up as part of a joint venture deal between Continental and Saudi distributor Almutlak Trade & Industries, is part of a "significant Middle East expansion" and will support growing demand for Continental products and services in the country.
- In April 2019, Magna Tyres Group, a manufacturer of premium quality Off-The-Road (OTR) and Al Faris Group, a rental service company renewed the annual supply contract until the end of 2019. With effect of this renewed agreement Magna Tyres will be Al Faris’ supplier for the entire GCC region including; Bahrain, Saudi Arabia and UAE.
- Major companies in the market are focused on research and development activities, in order to gain a competitive edge in the market. For instance, in June 2019, The Bridgestone Group developed a new lightweight tire technology, which uses less material during production without affecting its durability.
- Key players in the market are involved in product launches, in order to expand the product portfolio. For instance, in March 2019, Hankook Tire Company launched three new products e3 WiDE TL21, e3 MAX DL21, and SmartFlex DL15 at Mid-America Trucking Show [MATS]. These products are equipped with latest Hankook Tire innovations for better performance and safety.
Market Restraint
Strict regulatory policies regarding used tires are expected to hamper the KSA tire market growth during the forecast period. The Saudi Ministry of Commerce has prohibited the sales and import of used tires. This is done to reducing increasing traffic accidents in the region attributed to the use of low-quality tires. Moreover, the ministry has banned sales of overhauled tires for use in vehicles other than those they were originally manufactured for. This is expected to adversely affect the used tire market in the region. Furthermore, Saudi Arabia standard organization (SASO) mandates that a certificate of conformity is required to import of auto aftermarket parts. Shipments arriving without a certificate of conformity are rejected at the Saudi port of entry. It is also crucial for the labeling and marketing of any product imported into Saudi Arabia.
To know the latest trends and insights prevalent in this market, click the link below:
https://www.coherentmarketinsights.com/market-insight/ksa-tire-market-4694
KSA Tire Market - Impact of Coronavirus (Covid-19) Pandemic
The outbreak of COVID-19 pandemic as severely impacted the KSA tire market. In order to control the spread of virus, many countries opted for nationwide lockdown policies with temporary suspension of international travel and trade. With strict restrictions on physical distancing, numerous manufacturing companies had to shut down their operations, significantly impacting the economic activities. This has led to a sharp decline in sales automobiles and subsequently KSA tire market. However, economic activities have started taking pace with rollout of vaccines and decreasing cases of COVID-19. With many countries easing their regulations, the KSA tire market is expected to regain its lost traction in the near future.
Key Takeaways:
- The KSA tire market was valued at US$ 3,091 Mn in 2020 and is forecast to reach a value of US$ 7,494.4 Mn by 2028 at a CAGR of 11.8% between 2021 and 2028. This is owing to growing demand for four wheeler vehicles.
- The On Road segment was valued US$ 2,820.2 Mn in 2020 and is expected to witness a CAGR of 12.0% over the forecast period. This is owing to growing light truck & passenger car demands in the country.
Market Trends
Rising internet penetration in KSA has resulted in a major shift in consumer preference for making purchases of various goods via e-tail websites. According to Coherent Market Insights’ analysis, as of 2015, online retail accounts for around 30% of overall sales of tires in KSA. Moreover, simplicity in use and lucrative discount offered by online shops are expected to boost the demand for tires in the region. This trend is expected to continue during the forecast period.
Over the last decade, the unorganized market for tires in KSA has grown significantly. This is mainly driven by increasing imports of Chinese products available at significantly lower prices than that offered by other established players in the market.
Competitive Section
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.
