Saudi Arabia Bus Market Outlook to 2030

Saudi Arabia Bus Market Overview

• The Saudi Arabia bus market is valued at USD 16.7 billion, driven by increasing demand for public transportation and government-led infrastructure projects as part of Vision 2030. The growth in urbanization, especially in major cities like Riyadh and Jeddah, has contributed to the need for efficient public transport systems, including buses. The demand for electric buses is also accelerating, backed by initiatives aimed at reducing the countrys carbon footprint and supporting green mobility.
• Dominant regions in the Saudi Arabia bus market include Riyadh, Jeddah, and the Eastern Province. Riyadh leads the market due to its population density, government investments in public transport systems, and ongoing infrastructure projects. Jeddah and the Eastern Province follow closely due to their economic importance and large-scale industrial developments that increase the need for intercity and intra-city transport options.
• Saudi Arabias Vision 2030 outlines ambitious transportation goals, including expanding the share of public transport in urban areas to 20% by 2030. The government is working toward electrifying 10% of the countrys bus fleet by 2025, as part of its broader strategy to meet green fleet standards and reduce carbon emissions. In addition to fleet expansion, the government has committed to improving public transport accessibility across all major cities, reducing traffic congestion, and supporting the adoption of low-emission vehicles.

Saudi Arabia Bus Market Segmentation

• By Bus Type: The market is segmented by type into city buses, intercity buses, electric buses, and hybrid buses. Recently, city buses held a dominant market share due to the surge in demand for public transportation in urban areas. Government initiatives focusing on improving public transport infrastructure in cities like Riyadh and Jeddah have bolstered the demand for city buses. Additionally, the push toward reducing congestion and the growing need for reliable, affordable transportation options for the working population have further propelled this segment.
• By Application: The market is also segmented by application into public transportation, tourism, school buses, and corporate transport. Public transportation dominates the application segment, driven by the expansion of city bus networks and government funding in metro and bus rapid transit (BRT) systems. The increasing reliance on buses for commuting in major cities has bolstered this segment. Public transportation in Saudi Arabia is undergoing a transformation, with a focus on increasing accessibility, which has further boosted the growth of this sub-segment.

Saudi Arabia Bus Market Competitive Landscape

The Saudi Arabia bus market is dominated by several key players, both local and international. Leading companies in the market include Hafil Transport, SAPTCO, and global players like Volvo Buses and King Long. This consolidation highlights the influence of both local transport providers and international bus manufacturers in shaping the market. The presence of well-established local companies, alongside global manufacturers with advanced technologies, is critical for addressing the increasing demand for public transport.

Saudi Arabia Bus Industry Analysis

Market Growth Drivers

• Increasing Urbanization (Public Transit Expansion, Demand for Buses in Urban Areas): Saudi Arabia has experienced rapid urbanization, with over 84% of its population residing in urban areas by 2024, up from 82% in 2020, according to the World Bank. The government is prioritizing urban public transit systems to accommodate this shift, leading to an increased demand for buses in cities such as Riyadh and Jeddah. Riyadhs metro and bus network project, which is part of the citys $23 billion public transport plan, aims to have 1,000 buses operational by 2024. These efforts are aligned with Vision 2030 goals to reduce traffic congestion and provide efficient mass transit.
• Government Investments (Public Transport Projects, Vision 2030 Initiatives): The Saudi government has committed over $150 billion toward infrastructure projects under its Vision 2030 framework, including investments in public transport. In 2022, $3 billion was allocated to expanding bus fleets across major urban centers. As part of Vision 2030, the government aims to increase public transit usage from 2% to 20% by 2030, driving demand for buses, especially in growing urban centers. Projects such as the Riyadh Metro and Jeddahs public transport initiatives are directly contributing to this shift, with hundreds of buses expected to be integrated into these systems.
• Tourism Sector Growth (Demand for Intercity Buses, Transport Infrastructure): Saudi Arabia's tourism sector witnessed a boost in 2023, with 18 million international visitors, driven by the opening of NEOM and other tourism projects. This influx has created a growing demand for intercity bus services. In 2022, the tourism sector contributed nearly $42 billion to the Saudi economy, making the expansion of bus networks crucial for connecting tourist hubs such as Riyadh, Jeddah, and Makkah. The countrys growing intercity bus fleet is expected to serve not only tourists but also residents as the domestic tourism industry flourishes under the Vision 2030 objectives.

Market Challenges

• High Initial Cost of Electric Buses (Battery Costs, Infrastructure Investment): Despite the push for electric buses, their high upfront costs remain a challenge. The average price of an electric bus is about $300,000, more than twice the cost of a traditional diesel bus. The high cost is largely driven by battery technology, with batteries making up nearly 40% of the total bus cost. In addition, Saudi Arabia needs substantial infrastructure investment to build charging stations, with an estimated $4 billion needed by 2025 to meet the charging requirements of a growing fleet. These financial burdens are slowing widespread adoption, despite government incentives for green technology.
• Dependency on Imports (Component Supply Chain, Spare Parts Availability): Saudi Arabia heavily depends on imported buses and bus components, which has created challenges in maintaining a steady supply of vehicles and parts. In 2023, nearly 90% of buses were imported, primarily from China and Europe, making the market vulnerable to international supply chain disruptions. The global semiconductor shortage has exacerbated delays in the delivery of electric buses. Additionally, the reliance on foreign spare parts limits the local markets ability to maintain and repair bus fleets promptly, which is further complicated by the lack of local manufacturing capabilities for critical components.

Saudi Arabia Bus Market Future Outlook

Over the next five years, the Saudi Arabia bus market is expected to witness substantial growth, driven by government-backed transportation projects, technological advancements in electric and hybrid buses, and the increasing demand for efficient public transport systems. With Vision 2030 emphasizing the need for green and sustainable transport solutions, the adoption of electric buses is set to increase . Infrastructure improvements, such as the expansion of bus rapid transit (BRT) systems, will also play a key role in shaping the future landscape of the market.

Market Opportunities

• Technological Advancements (Telematics, Smart Bus Technologies): The introduction of telematics and smart bus technologies presents an opportunity to enhance the operational efficiency of bus fleets in Saudi Arabia. In 2023, the government initiated a pilot program for integrating telematics in over 500 public buses in Riyadh, allowing for real-time monitoring, route optimization, and predictive maintenance. By leveraging these technologies, bus operators can reduce downtime and maintenance costs while improving passenger experience. The smart bus market is expected to expand as part of the Vision 2030 digital transformation goals, which aim to modernize the public transport sector.
• Infrastructure Development (Bus Rapid Transit Systems, Charging Stations for EV Buses): Saudi Arabia is actively investing in the development of Bus Rapid Transit (BRT) systems in major cities. Riyadhs BRT system, expected to be operational by 2025, will feature 34 stations, and is designed to transport over 500,000 passengers daily. Additionally, the country plans to deploy over 2,000 electric vehicle charging stations by 2025, facilitating the growth of electric bus fleets. These infrastructure developments are part of the government's broader strategy to modernize the transport sector, create jobs, and support the countrys carbon reduction targets.