BlueWeave Consulting, a leading strategic consulting and market research firm, in its recent study, estimated Saudi Arabia spare parts market size value at USD 4.35 billion in 2021. During the forecast period between 2022 and 2028, BlueWeave expects Saudi Arabia spare parts market size to grow at a steady CAGR of 7.5% reaching a value of USD 7.13 billion by 2028. The expansion of Saudi Arabia spare parts market is driven by increasing vehicle customization, expanding vehicle average age, and evolving advanced technologies in manufacturing automotive spare parts. Additionally, the growing popularity of e-commerce platforms as well as a greater emphasis on maintaining vehicle and passenger safety while driving could contribute to the market expansion.
Saudi Arabians can afford private vehicles due to their high per capita income and superior urban living circumstances. One of the fundamental reasons Saudi Arabia prioritizes automotive development is that its imports account for most of the global automobile market. Rising consumer awareness of vehicle safety and maintenance as well as the entry of local market participants could also propel the growth of Saudi Arabia spare parts market. However, increasing raw materials prices are anticipated to hamper the market growth during the period in analysis.
Saudi Arabia Spare Parts Market– Overview
Saudi Arabia’s spare parts market is a replacement market due to a lack of car production capabilities in the country and its heavy reliance on imports. Manufacturers of automotive spare parts and components engage local suppliers in Saudi Arabia to manage their product demand. These distributors function as an agent between the manufacturer of the automobile spare parts component and the end user. Bridgestone, for example, appointed Al-Talayi Company Limited as its official Saudi Arabian dealer. Hankook Tire chose Bin-Shihon Group of Companies as their supplier.
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Harsh climate leading to increasing spare parts replacement ratio
Spare parts distributors are constantly being extended by spare part manufacturers to acquire penetration in the country’s aftermarket. As new companies emerge, the distribution network continues to develop to improve their consumer base. Saudi Arabia has scorching weather, with an average high temperature of more than 100°F (38°C). The country is also 34% covered in sand. The lack of vegetation in the country’s sandy parts causes the soil to become more permeable, resulting in more sandstorm activity and higher summer temperatures. As a result, vehicle air conditioners are frequently turned on during the trip. Continuous air conditioner use degrades the lifespan of air conditioning systems and the parts that comprise them, necessitating more frequent car part replacement. Furthermore, due to sandstorms, filter elements, such as air filters and oil filters must be changed on a regular basis. Hence, these two factors create a window of lucrative growth opportunities for major players in Saudi Arabia spare parts market during the period in analysis.
Challenge: Volatile raw material prices
Saudi Arabia does not have automobile and spare parts manufacturing industries. As a result, the country is highly dependent on imports for automobiles and their spare parts. Saudi Arabia spare parts market is considered as majorly a replacement market. Consequently, the market is vulnerable to fluctuations in the prices of spare parts and their raw materials used for producing them. Hence, high volatility in raw material prices and their availability may affect the growth of Saudi Arabia spare parts market during the forecast period.
Impact of COVID-19 on Saudi Arabia Spare Parts Market
COVID-19 pandemic had a detrimental effect on Saudi Arabia spare parts market, due to the closure of manufacturing units across major manufacturing countries, such as China and India, caused by imposition of lockdown related regulations and travel ban. The entire automobile industry’s supply chain was disrupted, affecting the production of the replacement parts. The primary challenge for the spare parts business changed from disruptions in the global supply chain to a general reduction in demand for automotive components. The suspension of all non-essential services reduced the demand for commercial vehicle components, hamper the growth of the spare parts industry.
During the post-pandemic period, the spare parts market, however, is expected to grow consistently as the demand for automobile components is inextricably linked to automakers’ profitability, as they are the primary customers of industry products. The benefits of original replacement components are one of the primary factors driving the expansion of the spare parts market in the post COVID-19 period. The surging demand for hybrid and all-electric vehicles, as well as greater availability of automotive components on e-commerce platforms, could fuel the market growth throughout the forecast period. The increase in used automotive sales is expected to create several opportunities for large corporations in the spare parts market in the post-pandemic era.
Saudi Arabia Spare Parts Market
Saudi Arabia Spare Parts Market– By Component
Based on component, Saudi Arabia spare parts market has major segments: Tires, Batteries, Air Filter, Brake Shoe, Spark Plugs, Brake Pad, and Brake Caliper. Among them, the tires component segment is expected to hold the highest market share in the Saudi Arabia spare parts market during the forecast period, as automotive tires have a limited replacement cycle and life, automotive sales, and affordability.
Saudi Arabia spare parts market is fiercely competitive. Prominent players in the market include Robert Bosch GmbH, 3M Company, Bridgestone Corporation, Denso Corporation, The Goodyear Tire & Rubber Company, The Yokohama Rubber Co., Ltd., Continental AG, Hankook & Company Co., Ltd., GS Yuasa International Ltd., and Michelin Group. To further enhance their market share, these players are primarily focused on the development of innovative and efficient products, new product releases, market initiatives, mergers and acquisitions, and other collaborative activities.
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