Market Trends of Saudi Arabia Industrial Electrical Components Industry
This section covers the major market trends shaping the Saudi Arabia Industrial Electrical Components Market according to our research experts:
Electric Motors and Starters Segment Expected to Dominate the Market
- The Kingdom of Saudi Arabia is one of the major global oil producers, with a production of 11.03 mb/d of crude oil in 2020. Saudi Arabia has maintained high crude oil production levels, despite a drop in global crude oil prices.
- Saudi Arabia continues to increase its oil and gas production, in order to maintain its export commitments. The country has plans to increase its gas production and promote the role of gas in its energy mix in the power and industrial sectors.
- With the economy of the country reliant on oil and gas production, the country invested in the oil and gas midstream and downstream markets for restructuring, modernization, and expansion of existing projects during 2019. For instance, in 2018, the state-owned firm in Saudi Arabia, Saudi Aramco, announced plans to invest more than USD 100 billion on the development of new refining and chemicals projects over the next decade, as the company envisages to balance its business between upstream and downstream operations. This is expected to result in massive augmentation in refinery and petrochemical infrastructure in Saudi Arabia, thus bolstering the demand for electric motors and starters.
- The country's automobile sector is one of the largest in the region, with over 452,544 vehicle sales in 2020. The country is also actively focusing on the usage of electric vehicles. In 2019, Saudi Arabia's sovereign wealth fund invested USD 1.3 billion and acquired majority ownership in California's EV start-up, Lucid Motors. In August 2020, Lucid Motors broke the 500-mile range barrier from a single charge.
- Saudi Crown Prince Muhammed bin Salman's Vision 2030 plan also includes increasing efforts to create a market for EVs in the country. Overall, the rise of vehicle sales and increasing focus on the integration of EVs are expected to drive the market for electric motors and starters in the automotive sector during the forecast period.
- Therefore, based on the above-mentioned factors, electric motors and starters segment is expected to dominate the industrial electrical components in Saudi Arabia during the forecast period.
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Increasing Investments in Infrastructure Sector to Drive the Market
- In Saudi Arabia, the infrastructure and construction sector is amongst the largest in the Gulf Cooperation Council (GCC) region, with high growth expected in upcoming years. In line, with the region's oil-rich economies, the country's government emphasized fueling infrastructure and building projects in the country, leading to an increase in demand for industrial electrical components.
- According to the Saudi Industrial Property Authority (MODON), the country plans to increase industrial cities from 22 in 2019 to 40 in the upcoming decade. MODON is overseeing the completion of four industrial cities in Sudair, Al-Kharj, Dammam, and Jeddah.
- Construction activities at the cities of Al-Kharj and Sudair are underway as of September 2020, and investments worth USD 320 million and USD 213.3 million are expected for each project. Other large-scale industrial projects include plans for the Jubail 2 City, which will specifically house petrochemical production infrastructures.
- Moreover, the government invested heavily in expanding the transportation infrastructure through city infrastructure projects, such as the USD 22.5 billion Riyadh Metro and Riyadh Rapid Bus Transit System. Saudi Arabia's infrastructure and construction industry continues to be driven by the advanced technology of new operating standards, which further leads to rapid growth in smart electrical components, such as monitoring and controlling devices amongst others in the country.
- Therefore, based on the above-mentioned factors, increasing investments with supportive givernment initiatives in the infrastructure sector in expected to drive the industrial electrical components market in the country during the forecast period.
