The automotive value chain is an excellent example of a highly promising downstream industry in Saudi Arabia, which is a major consumer of cars and trucks that are all currently imported. Saudi Arabia is expected to import up to 1 million cars a year by 2020. The market for replacement of tires and synthetic rubber components such as transmission belts and vehicle underhood materials is relatively large.
The government is attracting car manufacturers to Saudi Arabia. Isuzu, for example, has already set up a car assembly plant in Dammam. Jaguar Land Rover (JLR) is also planning a car manufacturing plant in Yanbu with a capacity of 50,000 cars per year by 2017. Original equipment manufacturers like Isuzu and JLR will be supplied by a network of local part producers. One of these important part producers are the tire manufacturers. The annual demand for replacement tires in Saudi Arabia alone is estimated to be well above 10 million units.