Saudi tire sales are forecast to surge over $ 10 billion by 2014, TechSci Research said Friday in its "Saudi Arabia Tire Market Forecast & Opportunities, 2017".

"Saudi Arabia’s tire sales have three major components, OEM, replacement and Exports which includes re-exports too. Growing used car market was valued at more than $ 800 million in year 2010, which is the major replacement market boost factor considering the growing purchasing power in the hands of buyers. There has been a considerable increase in the assembly of truck tire plants in the nation, which is the only factor catering to the OEM’s in the country. Whereas, Saudi Arabia being a prominent member in most of the Arab and world free trade agreements, acts as a major re-export zone to the other member nations," said Karan Chechi, Research Director with TechSci Research.

Saudi Arabia’s tire market is one of the largest in terms of both value and volume in the region, which represents a big attraction for international tire manufacturers and distributors. As a result, there are over 60 international brands already present in the Saudi Arabian tire market, with more and more tire makers expressing to enter the same, as it is a tremendously promising marketplace.

With a GDP (per capita) at more than $ 26,000 in 2011, and a rapidly growing population, Saudi Arabia’s tire market is visibly one of the fastest growing markets in the Arab nations. Strong developments in roughly all the major automobile segments has infused huge tire demand in the country.
"The tire industry in Saudi Arabia has been showing bullish signals in terms of market revenues during FY 2011 propelled by the growth in automobile sales volume in the nation. In 2010, there was an almost 4 percent increase in the total automobile sales figures compared to the previous year. Saudi Arabia showed no sluggish sales signal even in the time of global recessionary distress around the globe, signifying almost 14 percent increase in sales value during FY 2008 and 2009. The turnover of the tire industry in Saudi Arabia is expected to surpass $ 10 billion by 2014 end, driven by increasing demand from the OEM, replacement and Re-export tire segments," Chechi said.

A separate study by Research and Markets on Saudi tire industry projected that demand for tires and tubes is set to grow by 12 percent annually. Being the largest market for automotive tires in the Middle East, Saudi Arabia still imports them to satiate its needs. It runs up almost $ 800 million in imported tire bills alone on a yearly basis. The Kingdom imports 13 million tires every year and volumes are expected to keep on rising as consumer demand increases over the next few years. The major products include tires (passenger, truck, bus, trailers), tires (OTR, agricultural, industrial/ TBR), rims, tubes and casings, tire repair material, patches, retreading material and equipment.

A largely import-driven market, as there is little to no local manufacturing, the Saudi market is a magnet for leading international brands, with Japanese and American tire majors leading the way, followed by a strong representation from European and Asian brands. All tires imported into Saudi Arabia have to pass the stringent safety specifications laid down by the Saudi Arabian Standards Organization, before they can be marketed in the Kingdom.

Major companies reigning the market currently are Yokohama, Bridgestone, Hankook, and Michelin. In 2010, Japanese manufacturers topped the list of suppliers with a 41 percent share of the Saudi import market, while US companies came in fourth place after South Korea and China. Saudi tire industry practitioners believe that prices increases over the last two years has led to some traders buying low-quality low-priced tires instead. On the other hand, although the tire prices are rising, domestic demand in the country has not gone down.

There are approximately 60 tire brands sold in Saudi Arabia, half of which are well-known brands sourced from companies in the US, Japan, South Korea, China, Indonesia, Turkey, India and Europe. Demand is expected to remain high for temperature and traction passenger car tires since they can withstand Saudi Arabia’s hot and harsh climate.