|
Forecast Period
|
2025-2029
|
|
Market Size (2023)
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USD 1990.97 Million
|
|
CAGR (2024-2029)
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9.56%
|
|
Fastest Growing Segment
|
Forklift
|
|
Largest Market
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Northern & Central
|
|
Market Size (2029)
|
USD 3395.11 Million
|
Market
Overview
The Saudi Arabia construction equipment
lease/ rental market has shown robust growth, reaching a value of USD 1,990.97
million in 2023, and it is forecasted to expand to USD 3,395.11 million by 2029
with a compound annual growth rate (CAGR) of 9.56%. This growth is largely
fueled by Saudi Arabia's ambitious infrastructure and urbanization initiatives
under the Vision 2030 framework, which seeks to reduce the nation’s reliance on
oil by diversifying its economy. As a result, the demand for construction
equipment has surged, particularly in the leasing and rental segment. Saudi
Arabia’s commitment to transforming the nation is evident, having already
achieved the top position in the global RICS Construction Activity Index,
highlighting the continuous expansion and potential of its construction
industry. The emphasis on mega projects like NEOM and the Red Sea Project has
amplified the demand for advanced construction machinery, offering substantial
growth opportunities within the leasing and rental sector as companies aim to
control operational costs and capital expenditures.
Key growth drivers include the extensive
infrastructure projects that require an assortment of construction equipment
for execution. Leasing and renting enable companies to access a wide range of
machinery without the significant financial commitment of outright purchases,
particularly beneficial as technology advances and equipment demands vary
across projects. The construction sector in Saudi Arabia is witnessing a shift
toward urban development and smart city projects, which necessitates
specialized machinery and technology. Leasing offers flexibility, allowing
construction companies to access the latest equipment that meets stringent
project requirements while supporting cost-effective operations. For instance,
projects like the Riyadh Metro and Jeddah Economic City demand state-of-the-art
machinery, driving a preference for rental services. This approach helps
companies manage costs and risk while benefiting from high-quality equipment
that can be easily updated as new technologies emerge.
While the market presents promising
opportunities, certain challenges remain, particularly in terms of regulations,
logistical requirements, and fluctuating equipment costs. Leasing companies
must continuously invest in fleet upgrades to keep pace with technological
advancements, which can be costly. There is also a rising demand for
sustainable construction equipment, as the industry moves towards eco-friendly
practices, necessitating electric or hybrid machinery to meet environmental
goals. Companies in the lease and rental sector face the challenge of balancing
these investments with competitive pricing. Moreover, the construction
industry’s reliance on high-quality equipment and specialized machinery
requires efficient supply chains and skilled personnel, which could strain
resources, particularly for smaller firms. As the market continues to grow,
players in the leasing and rental sector are expected to navigate these
challenges, capitalizing on opportunities to support Saudi Arabia’s
transformative vision and the evolving demands of the construction industry.
Market Drivers
Booming Construction Sector
Saudi Arabia’s Vision 2030 initiative,
aimed at diversifying the economy and reducing dependence on oil, has led to an
unprecedented rise in infrastructure and construction projects. In February
2024, NEOM announced the world's largest earthworks and piling operation at the
site of The Line. Other megaprojects include the Red Sea Project, Diriyah,
Qiddiya, and ROSHN. Riyadh also has several projects in various stages of
construction. These megaprojects are driving demand for construction equipment
across various segments, including earthmoving machinery, material handling
equipment, and heavy machinery. Large-scale projects are key factors boosting
the demand for rental equipment in the Kingdom, as companies prefer renting to
avoid high upfront costs and maintenance responsibilities. Saudi Arabia's
Vision 2030 is driving an impressive USD 1.3 trillion in investments across the
kingdom's real estate, infrastructure, and other sectors. Furthermore, Aramco
and TotalEnergies have granted contracts for engineering, procurement, and
construction related to the Amiral complex, which is valued at USD 11.0
billion. This complex represents a significant expansion of the SATORP refinery
located in Jubail, Saudi Arabia. This petrochemical facility is anticipated to
support SATORP in furthering Aramco’s strategy of converting liquids to
chemicals, with commercial operations expected to commence in 2027.
Growing Strategic Partnerships &
Technological Advancements
Saudi Arabia's construction equipment
lease/ rental market is thriving due to significant investments and strategic
alliances. Technological advancements have increased demand for modern
machinery, leading to a surge in strategic partnerships and joint ventures.
These partnerships aim to leverage advanced technologies, expand equipment
fleets, and strengthen service networks. For instance, in 2024, the Front End
Limited Company, a Saudi-based enterprise, announced an exclusive partnership
agreement with Crane+. Similarly, Al Marwan Machinery signed an exclusive
agreement to supply KOBELCO crawler cranes in the Saudi market, capitalizing on
the demand for high-quality heavy machinery, particularly lifting equipment, in
Saudi Arabia's construction and infrastructure sectors.
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Key
Market Challenges
High Competition and Demand Pressure
In Saudi Arabia’s construction equipment
lease/ rental market, high competition among local players and demand pressure
present significant challenges. The construction sector, driven by ambitious
projects under Vision 2030 (such as NEOM and The Red Sea Project), experiences
fluctuating demand. Peaks occur during certain phases of these projects,
creating pressure on equipment availability and logistics. This intermittent
demand requires companies to manage their fleets flexibly, often resulting in
equipment shortages or surpluses that can disrupt profitability. Consequently,
many companies, especially smaller or local rental service providers, face
difficulties in maintaining profitability.
To remain competitive, they often resort
to offering discounts, bundling services, or providing extended rental periods,
all of which impact their profit margins. Additionally, the pressure to
maintain and upgrade equipment to meet client demands for modern, reliable
machinery further adds to the operational costs of these companies. Smaller
players, with limited resources, often struggle to invest in larger, modern
fleets or to match the pricing strategies of global competitors, leading to
increasing market consolidation.
Maintenance and High Operating Costs
One of the critical challenges in the
Saudi Arabia construction equipment lease/ rental market is the high cost of
maintaining and operating rental fleets. Harsh climatic conditions, including
extreme heat, dust, and sandstorms, significantly increase the wear and tear on
equipment, leading to frequent breakdowns and higher maintenance costs.
Companies are forced to invest in
frequent repairs and replacement parts, which raises operational expenses and
decreases profitability.
In Saudi Arabia, delays in construction
projects contribute to increased downtime for construction equipment. Large
infrastructure projects, such as Neom and the Red Sea Project, are often
subject to delays due to various factors, including regulatory approvals,
funding issues, labor shortages, and changes in project scope. These delays
directly affect the utilization rate of rented construction equipment, as
machinery scheduled for deployment on a specific project often remains idle
until the project resumes. Equipment that sits unused during project delays
incurs costs.
Key
Market Trends
Rising Preference for Chinese Equipment
Saudi Arabia’s construction equipment
lease/ rental market has witnessed a growing preference for China-made
equipment, driven by several factors, including cost-effectiveness,
technological advancements, and the availability of modern features in Chinese
machinery. Brands such as SANY, XCMG, Zoomlion, and LiuGong offer construction
machinery at prices that are often lower than those of their Western
counterparts. This enables rental companies to expand their fleets with lower
capital investment, giving them a competitive edge in the price-sensitive market.
As project costs continue to rise, contractors and rental firms seek
cost-efficient solutions to maintain profitability. Chinese equipment
manufacturers have strengthened their after-sales service networks in Saudi
Arabia, including service centers, dealer partnerships, and the ready
availability of spare parts, to increase the confidence of rental companies.
Focus on Diversified Rental Solutions
A key trend in the construction
equipment lease/ rental market in Saudi Arabia is the growing emphasis on
diversified rental solutions. For instance, Kanoo Rental, the rental arm of
Kanoo Machinery, is expanding its services beyond traditional equipment leasing
to offer more flexible and tailored options. These include dry lease contracts
(both short- and long-term), lease-to-own programs, and buy-back and trade-in
options for customers looking to upgrade or exchange equipment. Furthermore,
the sale of used and refurbished equipment, along with the refurbishment of
existing machines, is becoming increasingly popular, allowing businesses to
access high-quality, cost-effective equipment while maintaining operational
flexibility. This trend is driven by the demand for scalable solutions across
various sectors, helping companies manage capital expenditure while addressing
project-specific needs. For instance, in 2022, Expertise Contracting Co.
ordered 79 Tadano Cranes, including 50 AC 3.055-1, 17 AC 5.130-1, 11 AC
5.250-1, and 1 AC 8.500-1 models to expand its crane portfolio. The company
serves over 1,500 clients in sectors like petrochemicals, oil and gas, and
energy across the Middle East.
Segmental
Insights
Type Insights
The Saudi Arabian construction equipment
lease/ rental market offers a broad range of machinery to meet the specific
needs of infrastructure, commercial, and residential projects. Loaders are
essential for earthmoving and material transport, supporting foundational site
preparation. Forklifts, with their compact design, enable precise handling in
tight spaces, making them valuable on construction sites for moving heavy
building materials efficiently.
Excavators are versatile and used for
digging, demolition, and lifting. They accommodate various attachments,
allowing them to perform specialized tasks like trenching and land clearing, which
are critical for large-scale developments. Dozers, built for heavy-duty
earthmoving and grading, prepare and level land, which is essential in
establishing stable groundwork.
Additional equipment, including cranes,
backhoes, and trenchers, addresses specific needs like lifting and trenching.
Each equipment type plays a unique role, collectively enabling efficient
project execution to meet the demands of Saudi Arabia’s expansive construction
initiatives. Together, they create a robust support system for the sector's
extensive infrastructure and urban development projects.
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Region
Insights
The northern
and central regions of Saudi Arabia play a crucial role in the construction
equipment lease and rental market, hosting a significant concentration of major
infrastructure projects. This regional dominance stems from high-profile
projects such as the Riyadh Metro, the King Abdullah Financial District, and
the NEOM mega-city development, which collectively fuel demand for diverse
construction machinery on a large scale. These projects require substantial
equipment resources, including loaders, excavators, cranes, and dozers,
creating robust leasing and rental opportunities for suppliers catering to
these high-demand regions.
In central
Saudi Arabia, Riyadh’s metropolitan area exemplifies the country’s commitment
to urban development. The Riyadh Metro project, one of the most extensive
public transport networks being built in the region, necessitates substantial
construction equipment for both above-ground and underground development,
driving equipment demand for lease and rental options. Similarly, the King
Abdullah Financial District is set to establish Riyadh as a financial hub, and
its complex construction demands specialized machinery for various stages of
high-rise and infrastructure construction. These projects not only reflect
Riyadh’s strategic economic role but also its impact on the construction
equipment market.
Further north,
NEOM represents one of the Kingdom's most ambitious initiatives under Vision
2030, designed to be a futuristic mega-city with sustainable, smart
infrastructure. NEOM’s scale and vision necessitate advanced construction
equipment for rapid, environmentally conscious development. The demand for
equipment leasing in NEOM and nearby areas highlights the importance of
flexible, scalable solutions that leasing provides, supporting the project's
evolving requirements without high capital investments from individual firms.
Recent
Developments
- Zahid
Tractors, the authorized CATERPILLAR dealer and equipment rental firm in
Saudi Arabia, has significantly benefited from the NEOM giga project. The
company has reported the provision of 5,000 units, including tractors,
excavators, loaders, graders, and trucks, which are presently deployed
on-site. Furthermore, Zahid Tractors anticipates that this figure will
increase to 10,000 units in the forthcoming years.
- In
December 2023, Arabian Machinery & Heavy Equipment Co. (AMHEC), a
prominent crane and heavy haulage firm, placed an order for 55 new cranes
from Liebherr. This order marks the largest ever received by Saudi
Liebherr Co. The acquisition includes a diverse range of mobile cranes
with lifting capacities ranging from 100 to 800 tonnes. As part of this
significant order, AMHEC will obtain the following models: LTM 1100-5.3,
LTM 1110-5.2, LTM 1160-5.2, LTM 1230-5.1, LTM 1250-5.1, LTM 1300-6.3, LTM
1450-8.1, LTM 1650-8.1, and LTM 1750-9.1.
- In
November 2024, Dayim Holdings, a rental and logistics company based in
Saudi Arabia, secured a substantial investment from the private equity
firm LetterOne. This firm oversees a portfolio of USD 20 billion, focusing
on various sectors including energy, telecommunications, retail, and
healthcare. Dayim Equipment operates rental facilities across Saudi
Arabia, Qatar, Kuwait, Bahrain, and the United Arab Emirates, offering an
extensive selection of construction equipment and tools for rent.
Key
Market Players
- Expertise Contracting Co Ltd
- Mohammed Abdullah Al Areedh Company
- Arab International Transport and
Heavy Equipment Company Ltd
- Fahad S. Al-Tamimi Group
- Zahid Tractors and Heavy Equipment
Company Ltd
- Al Jaber Heavy Lift & Transport
Co. Ltd
- Bin Quraya Company Limited
- Source Machinery for Trading &
Contracting Company Ltd
- SAQCO Arabia Limited Company
- National Basics Company Limited
|
By Type
|
By Application
|
By Power
Output
|
By End
User
|
By Region
|
|
- Loader
- Forklift
- Excavator
- Dozers
- Others
|
- Material Handling
- Earth Moving
- Concrete and Road Construction
- Others
|
- <100hp
- 101-200hp
- 201-400hp
- >400hp
|
- Oil
& Gas
- Construction
- Infrastructure
- Manufacturing
- Others
|
- Northern
& Central
- Western
- Eastern
- Southern
|
|
Report
Scope:
In this report,
the Saudi Arabia Construction Equipment Lease/ Rental Market has been segmented
into the following categories, in addition to the industry trends which have
also been detailed below:
·
Saudi
Arabia Construction Equipment Lease/ Rental Market, By Type:
o
Loader
o
Forklift
o
Excavator
o
Dozers
o
Others
·
Saudi
Arabia Construction Equipment Lease/ Rental Market, By Application:
o
Material
Handling
o
Earthmoving
o
Concrete
and Road Construction
o
Others
·
Saudi
Arabia Construction Equipment Lease/ Rental Market, By Power Output:
o
<100hp
o
101-200hp
o
201-400hp
o
>400hp
·
Saudi
Arabia Construction Equipment Lease/ Rental Market, By End User:
o
Oil
& Gas
o
Construction
o
Infrastructure
o
Manufacturing
o
Others
·
Saudi
Arabia Construction Equipment Lease/ Rental Market, By Region:
o
Northern
& Central
o
Western
o
Eastern
o
Southern
Competitive
Landscape
Company Profiles: Detailed
analysis of the major companies present in the Saudi Arabia Construction
Equipment Lease/ Rental Market.
Available
Customizations:
Saudi Arabia
Construction Equipment Lease/ Rental Market report with the given market
data, Tech Sci Research offers customizations according to a company's specific
needs. The following customization options are available for the report:
Company
Information
- Detailed
analysis and profiling of additional market players (up to five).
Saudi Arabia
Construction Equipment Lease/ Rental Market is an upcoming report to be
released soon. If you wish an early delivery of this report or want to confirm
the date of release, please contact us at [email protected]