Increasing Investments into infrastructure and government schemes are driving the growth in Saudi Arabia construction equipment rental market in the forecast period, 2017-2027F.
According to TechSci Research report, “Saudi Arabia Construction Equipment Rental Market– – Industry Size, Share, Trends, Competition, Opportunity and Forecast, 2017-2027”, the Saudi Arabia construction equipment rental market stood at USD1486.45 million in 2021 and is expected to register a CAGR of 7.57% to reach USD2395.33 million by 2027. Saudi Arabia is a prime producer and exporter of oil & gas and is witnessing huge demand worldwide due to growing energy requirements. The leading producers are setting up new wells and pipelines. The installation of oil rigs and pipelines is expected to significantly impact the Saudi Arabia construction equipment rental market demand. Market players are adopting attractive marketing strategies to stay ahead in the market, such as the growing popularity of the concept lease to own, in which the rental companies who could not invest in the purchase of construction equipment take it on lease from the dealer and pay the cost of equipment in easy installments.
However, the maintenance cost incurred by construction equipment rental companies at regular intervals and the intense competition among the market players may restrain the growth of the Saudi Arabia construction equipment rental market in the forecast period.
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The Saudi Arabia construction equipment rental market is segmented into equipment type, region, province, and competitive landscape.
Based on equipment type, the market is divided into wheel loader, crane, excavator, bulldozer, dump truck, diesel genset, motor grader, and telescopic handler, and others. The wheel loader segment dominated the market in 2021 by covering a market share of 22.45% of the overall market share. Wheel loader is also known as a bucket loader, scoop loader, and skip loader. The wheel loader features a front-mounted bucket designed to scoop, transport, and hold loosely packed materials such as sand and pulverized minerals in the oil & gas industry. The high demand for wheel loaders from the construction sector for different applications such as block handling, log handling, waste disposing, and slag handling drives the segment demand. Also, the ongoing construction and infrastructure development projects such as the Red Sea Tourism Project, National Infrastructure Fund (NIF) by the leading authorities are expected to contribute to the market growth significantly.
On the basis of regional analysis, the South & West region captured the highest market share by accounting for a market share of 46.05% in 2021 and is expected to maintain its dominance through the next five years. This region has a number of major holy destinations, such as Mecca and Medina, which witnesses a huge footfall of Islamic pilgrims throughout the year. The massive number of tourists is boosting the hospitality and construction sector of the region. Leading authorities are trying to improve public facility services by renovating the existing infrastructure such as airports, hotels, restrooms, and other facilities and constructing new facilities. The construction companies and market players prefer to opt for construction equipment rental services as they provide the latest and most advanced construction equipment at comparatively affordable rates and eliminate maintenance costs.
Major market players operating in Saudi Arabia construction equipment rental market are:
- Zahid Tractor and Heavy Machinery Co. Ltd
- General Contracting Company (GCC)
- Bin Quraya for Rental and Heavy Equipment
- Industrial Supplies Development Co. Ltd. (ISDC Rental Company)
- Abdulla Nass & Partners Co. Ltd. (ANPC)
- Saad Al Qahtani Contracting Co. (SAQCO)
- Arabian Consolidated Trading (ACT Crane & Heavy Equipment)
- Altaaqa Alternative Solutions Company
- Al Faris Group
- Rezayat Sparrow Arabian Crane Hire Co. Ltd
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“The Kingdom of Saudi Arabia has implemented strict regulations to restrict the import of construction equipment in the country. Saudi Arabian Standards Organization (SASO) guides the manufacturers to provide quality and highly technologically advanced construction equipment tools and services. Construction companies opt for rental services to obtain advanced construction equipment at affordable rates. Market players are advised to invest in buying novel construction equipment to capture the largest market share. Also, the adoption of alternative sales channels for the expansion of the consumer base is expected to propel the growth of Saudi Arabia construction equipment rental market through 2027,” said Mr. Karan Chechi, Research Director with TechSci Research, a research-based global management consulting firm.
Continuous Decline in Rental Cost Driving Market Growth
Although Saudi Arabia has begun to diversify its economy away from oil, oil exports remain the country’s primary source of revenue. The revenue of the Kingdom of Saudi Arabia has decreased as a result of a considerable drop in crude oil prices around the world. The government also made a number of financial and economic initiatives to solve the problem. As a result, competition among rental providers has increased, forcing these companies to lower their rental rates even further. Furthermore, most rental companies offer discounted rental rates for most construction equipment, lowering the country’s average equipment rent. As a result, the construction equipment rental industry in Saudi Arabia is expected to be driven by customization and flexibility in rental agreements over the next few years.
Increase in Operator-Equipment Bundling Driving the Growth in the Market
A skilled operator with expertise and technical understanding of ARAMCO’s (Saudi Arabian Oil Company) safety and security procedures for operators who will be working on ARAMCO’s sites is necessary to ensure the smooth operation of the construction equipment. However, a provision for an operator may or may not be included in the construction equipment rental agreement between the companies. As compared to other construction equipment operators in the country, operators with ARAMCO certification earn almost 70% to 80% more money. As a result, the Saudi Arabia Construction Equipment Rental Market is expected to benefit from operator equipment bundling for efficient and effective construction equipment work.
Stringent Government Regulations Boosting the Market Growth
Saudi Arabia’s government has established stricter regulations for importing construction equipment into the country. The Saudi Arabian Standards Organization (SASO) has advised producers and responsible authorities on how to deliver the highest quality of service to beneficiaries, focus on improving technical standards, and protect customers’ health and safety, among other things. As a result, building organizations, contractors, and dealers are increasingly focused on renting construction equipment including graders, backhoes, trenchers, and other similar machines, which is likely to drive the Saudi Arabia construction equipment rental market forward.
Press Release : https://www.techsciresearch.com/news/7179-saudi-arabia-construction-equipment-rental-market.html
“Saudi Arabia Construction Equipment Rental Market By Equipment Type (Wheel Loader, Crane, Excavator, Bulldozer, Dump Truck, Diesel Genset, Motor Grader and Telescopic Handler, Others), By Region, By Province, Competition, Forecast and Opportunities, 2017-2027”, has evaluated the future growth potential of Saudi Arabia construction equipment rental market and provides statistics & information on market size, structure and future market growth. The report intends to provide cutting-edge market intelligence and help decision makers take sound investment decisions. Besides, the report also identifies and analyzes the emerging trends along with essential drivers, challenges, and opportunities in Saudi Arabia construction equipment rental market.
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