The global KSA 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 2023-2030, as highlighted in a new report published by Coherent Market Insights.
Tires are an essential component of vehicles, ensuring optimum performance, safety, and fuel efficiency. The KSA tire market is driven by the growing automotive industry in Saudi Arabia. The increasing demand for passenger and commercial vehicles, coupled with favorable government initiatives and investments in the automotive sector, is boosting the market growth. The escalating construction activities and the expansion of the logistics industry are also contributing to the demand for tires in the country. Additionally, the rising per capita income and changing consumer lifestyles are further fueling the market growth.
Market Key Trends:
One key trend in the KSA tire market is the growing preference for eco-friendly tires. With increasing environmental concerns, consumers are shifting towards tires that are made from sustainable materials and offer lower rolling resistance. Eco-friendly tires not only reduce carbon emissions but also improve fuel efficiency. Moreover, tire manufacturers are focusing on developing innovative technologies and materials to enhance the performance and durability of tires while reducing their environmental impact. This trend is expected to drive the demand for eco-friendly tires in the KSA tire market over the forecast period.
Threat of New Entrants: The KSA tire market faces a low threat of new entrants due to high barriers to entry. These barriers include the need for significant capital investment, strong distribution networks, and economies of scale enjoyed by existing players. Additionally, established tire manufacturers benefit from brand recognition and customer loyalty, making it difficult for new entrants to capture market share.
Bargaining Power of Buyers: Buyers in the KSA tire market have moderate bargaining power. While they have the option to choose from a variety of tire brands and suppliers, they are limited by the necessity of purchasing tires for their vehicles. However, buyers can exert some influence through their purchasing volume, especially in the fleet and commercial vehicle segments, where bulk orders can lead to discounts and better pricing.
Bargaining Power of Suppliers: Suppliers in the KSA tire market have relatively high bargaining power. Raw material suppliers for tire manufacturing, such as rubber and steel, hold a significant amount of control over pricing and supply. Tire manufacturers rely on these suppliers, and any disruptions or fluctuations in prices can have a major impact on production costs and profitability.
Threat of New Substitutes: The threat of new substitutes in the KSA tire market is low. While alternative forms of transportation, such as electric vehicles, may reduce the overall demand for tires, there are no direct substitutes that can entirely replace the need for tires. As long as vehicles remain the primary mode of transportation, the demand for tires will continue to exist.
Competitive Rivalry: The KSA tire market is highly competitive, with numerous local and international players vying for market share. The presence of well-established companies like Bridgestone, Michelin, and Goodyear intensifies the competition. Factors such as product quality, pricing, brand reputation, and distribution networks play a vital role in determining market share.
The KSA tire market is expected to witness high growth, exhibiting a CAGR of 11.8% over the forecast period (2023-2030). This growth can be attributed to increasing vehicle sales in the region, driven by factors such as rising population, economic development, and infrastructure projects.
In terms of regional analysis, the KSA tire market is the fastest-growing and dominating region in the Middle East. The market is witnessing significant growth due to factors such as rising disposable income, increasing urbanization, and a growing automotive industry. The government’s focus on diversifying the economy and attracting foreign investments also contributes to the market’s growth.
Key players operating in the KSA 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. These key players dominate the market due to their strong brand presence, extensive distribution networks, and technological advancements in tire manufacturing.
In conclusion, the KSA tire market is expected to experience significant growth in the coming years. Factors such as increasing vehicle sales, regional economic development, and the presence of key players contribute to the market’s expansion. However, intense competition and high bargaining power of suppliers pose challenges to market players.
1. Source: Coherent Market Insights, Public sources, Desk research
2. We have leveraged AI tools to mine information and compile it