New report says Saudi Arabia's automotive sector is set for a rapid transformation in the coming years
Saudi Arabia’s automotive sector is set for a rapid transformation in the coming years, with 20 percent of the female population, or three million drivers, expected to be added to the kingdom’s roads by 2020, according to a new report.
A whitepaper, published by global research company Aranca, said the lifting of the ban on women driving in Saudi Arabia, along with recovering oil prices and economic policies aimed at boosting consumer spending, will result in an eight percent per annum increase of passenger vehicles sales until 2022.
The report added that in addition to new car sales, the positive impact of a new customer segment over the next 1-3 years will be felt in the kingdom’s automotive aftermarket, which was valued at $7.4 billion in 2017.
According to Aranca, vehicles in operation in Saudi Arabia stood at 7.3 million in 2017, with 438,000 new passenger cars and 110,000 new commercial vehicles sold for the year.
Tyres accounted for the greatest slice of revenue in the Saudi’s spare parts market, with a 30 percent share in 2017 ($2.2 billion).
Aranca’s whitepaper was published ahead of Automechanika Jeddah 2019, the only dedicated trade show for the automotive aftermarket and service industry in the kingdom’s western region. The 3rd edition of the three-day event will take place from February 26-28 at the Jeddah Centre for Forums and Events.
Aranca said 10 million vehicles will ply Saudi roads by 2022, including 6.5 million passenger vehicles and 3.5 million commercial vehicles.
It added that as a result, demand for spare parts and related auto services will grow six percent annually, reaching a value of $9.8 billion in 2022.
Many of these opportunities will likely arise in Saudi’s western regions of Madinah and Makkah, where more than one million women are expected to get behind the wheel by 2020, it noted.
The whitepaper further stated that key industry players are already taking initiatives to capitalise on opportunities created by women being allowed to drive, including the creation of women-only car showrooms, auto-insurance claims centres and driving schools dedicated to women.
Mahmut Gazi Bilikozen, Automechanika Jeddah’s show director, said: “Consumption of auto spare parts and services in Saudi Arabia will grow at a healthy rate in the coming years, aided by the addition of a whole new segment of the population that is now allowed to drive.”