Growing automobile sales coupled with expanding vehicle fleet will drive the Saudi Arabian tyre market to grow at a CAGR (compound annual growth rate) of over 11 per cent during 2016 – 2021, a report said.

Improving macroeconomic scenario, growing vehicle fleet, increasing automobile sales and favourable government policies are some of the major factors anticipated to boost the demand for tires in the country over the next five years, added the report entitled "Saudi Arabia Tyre Market Forecast & Opportunities, 2021" from TechSci Research, a research based global management consulting firm.

The cumulative sales of passenger cars and commercial vehicles in the country grew at a CAGR of 8.91 per cent during 2011-2015.

On the basis of vehicle type, the tire market in Saudi Arabia has been segmented into five categories, namely, passenger car, medium & heavy commercial vehicle, two-wheelers, off-the-road and light commercial vehicle. In 2015, passenger car segment dominated the country's tyre market.

According to the World Bank, the Gross National Income per capita of Saudi Arabia was $23,550 in 2015. Moreover, the Government of Saudi Arabia banned the import of used vehicles over the age of five years in 2009.

Backed by increasing purchasing power and favourable government policies, the passenger car segment is anticipated to maintain its dominance in the country's tire market over the next five years as well.

"Eyeing robust demand for various vehicle types, some of the prominent tire suppliers such as Chinese, Bridgestone, Michelin, Continental, Goodyear, Yokohama, Hankook, etc. are operating in Saudi Arabia,” said Karan Chechi, research director with TechSci Research.

“Moreover, due to its strategic location in the Middle East region, many companies use Saudi Arabia as a re-exporting hub," he stated.

Imports from Asian countries such as Thailand, China, Taiwan, South Korea and Japan dominates the Saudi Arabia tyre market.

These countries accounts for more than 85 per cent of the total tyre imports in Saudi Arabia. Lower overheads and local raw material sources are the major reasons for tyres being imported from these countries,” he added. – TradeArabia News Service