Views: 110 Author: HP Chen Publish Time: 2022-11-19 Origin: Site Inquire
Saudi Arabia is located on the Arabian Peninsula in southwestern Asia, bordering the Persian Gulf to the east and the Red Sea to the west, bordering Jordan, Iraq, Kuwait, the United Arab Emirates, Oman, Yemen, Egypt and other countries. Oil reserves and production rank first in the world and are also the main pillar of the Saudi economy. Abundant resources support this very young country. The population structure is young. The population under the age of 30 accounts for 70% of the total population, and the population under the age of 20 accounts for 46%. It has extremely strong purchasing power. Except for oil and accessories, Saudi Arabia basically relies on imports for other commodities. The level of consumption is wide. In Saudi Arabia, there are not only wealthy royals and aristocrats, the wealthy middle class, but also the lower class and foreign workers who account for two-thirds of the total population, forming three consumer groups: high, middle and low.
Saudi Arabia's current state of the economy
Saudi Arabia implements a free market economic policy, especially in recent years, vigorously promotes the policy of economic diversification, strives to expand non-oil production, develop non-oil mining and light industry, and at the same time attaches importance to the development of agriculture, and has achieved self-sufficiency in food. The economy is growing at an unprecedented pace, and financing needs are multiplying. Regardless of the economy, currency, or political situation, Saudi Arabia is very stable. In 2017, the gross domestic product (GDP) of Saudi Arabia was 678.5 billion US dollars, the population exceeded 31 million, and the per capita GDP reached 20,957 US dollars. The GDP increased by 3.8% year-on-year. , retail, transportation, communications and non-petroleum manufacturing all increased by more than 5% year-on-year; the total import volume was 173.8 billion US dollars, an increase of 3.3% year-on-year. Saudi Arabia ranks 15th among the most creditworthy economies in the world and 14th among 76 countries with low credit risks; Saudi Arabia's economy will maintain rapid growth and become one of the three fastest growing economies in the world . The 2017 Global Retail Trade Index Ranking was released, and Saudi Arabia ranked 11th.
First. Basic Situation of Saudi Automobile Market
1. Saudi Arabia is located in the middle of the three continents of Europe, Asia and Africa, accounting for four-fifths of the Arabian Peninsula, with a land area of 2.25 million square kilometers. It is one of the most populous countries in the Middle East.
2. Except for the railway line from Dammam to the capital Riyadh, land transportation mainly relies on roads.
3. The Saudi market covers almost all brands of cars in the world. There are large and luxurious buses between cities in Saudi Arabia, especially leading to the two holy cities of Mecca and Medina, and car rental companies also have large cars for rent.
4. There is no automobile industry in Saudi Arabia, and all the automobiles needed in the country rely on imports. The Saudi car market accounts for 50% of the car market in the Middle East.
5. According to government survey data: Saudi Arabia imported more than one million vehicles in 2016, including small cars, passenger cars and trucks, with a value of more than 20.9 billion US dollars. At present, Saudi Arabia has 10 million passenger cars and commercial vehicles, and it is also the largest market for auto parts and related services in the Middle East.
About the modified car market in Saudi Arabia
Saudi Arabia has an increasing demand for vehicle safety equipment and luxury goods for passenger cars and vans. Due to the ever-increasing demand for luxury modifications of cars, many of the necessary equipment that cars should have have been sacrificed. The needs of car owners or drivers have become a consideration for luxury car manufacturers. Car equipment and application technology are all about the appearance and fashion style of the car. In the Saudi concept, luxury cars are the safest. Saudis began looking to equip their cars with designer wheels, chrome steering wheels, screen monitors, DVD players, loudspeakers, tweeters, air bags, anti-theft systems, and more.
Second. Saudi auto parts market
1. Undoubtedly, auto parts from Japan, the United States, China, the European Union and other countries occupy a dominant position in the Saudi market. Various brands and models of auto parts from these countries have exclusive stores or agency banks, forming a thoughtful and fast service network.
2. Tires are the main imported varieties of auto parts. The proportion of heavy-duty vehicle tires occupies the first place, accounting for about 41.8% of the entire tire market in Saudi Arabia. Car and Jeep tires came in second at 39.1%. Other types of vehicle tires and inner tubes accounted for 4.6% of the tire market share.
3. Saudi Arabia imports tires mainly from Japan, the United States, South Korea, and China. The main source of Saudi tires is very extensive. There are more than 350 dealers in Saudi Arabia providing auto parts to automakers from the United States, Japan, Europe, Australia and other countries in Asia. Some Saudi local manufacturers produce filters, radiators, batteries, exhaust pipes, converters and other components.
According to data from the Saudi General Statistics Office, in 2015, the import trade volume of auto parts, tires and batteries in Saudi Arabia reached 2.53 billion US dollars, and the re-export volume reached 51 million US dollars. The transaction volume of the auto parts market in that year was about 2.6 billion US dollars. Among them, the import value of auto parts reached 996.5 million US dollars, the import value of car tires reached 15.5 million US dollars, the import value of truck tires reached 15.3 million US dollars, and the import value of automobile batteries reached 209.7 million US dollars. The main source of car batteries is South Korea, accounting for 64% of the total imports; the main importer of tires is Japan, accounting for 30% of the total; auto parts are mainly imported from Japan, China, South Korea, the United States, Germany and France.
Third. Prospect Analysis of Saudi Automobile Market
The Saudi auto market has great potential and broad development prospects, and has the following favorable conditions:
1. Strong market demand. A large number of projects have been launched, and the number of engineering vehicles and commercial vehicles has continued to increase. In addition, the increase in residents' income has also promoted the renewal of family cars.
2. The population increases and consumption is promoted. A growth factor that cannot be ignored is that the ban on driving for women has been lifted, allowing them to have a legal driver's license. This move is expected to increase the domestic auto market by 6% to 10% at one time. Major car dealers have already begun to prepare for the launch of the women's car buying market. Be prepared, this move will not only increase the demand for cars, but will also drive peripheral products.
3. The cost of maintaining a car is low, which promotes the development of the automobile market. The tariff on imported cars in Saudi Arabia is 5%, and the price of gasoline is 0.95 riyal (about 0.253 US dollars) per liter. There is no road maintenance fee, no toll booth, and no parking fee. It is one of the countries with the lowest cost of car maintenance in the world. Superior natural conditions and preferential policies have promoted the development of the sand car market.
4. Saudi Arabia is not only the country with the largest trade volume in the Middle East and the adjacent African region, but also the market with the largest economic scale and the fastest growth rate. At the same time, Saudi Arabia's demand for auto parts is increasing, and the demand for passenger car parts will grow at a rate of 7.7% in the next 5 years, reaching 5.5 billion US dollars by 2020. Demand for commercial vehicle accessories to grow to $3.65 billion in 2020
5. Saudi Arabia suffers from high temperature, drought and little rain all the year round, and wind and sand are rampant. Every year, millions of Muslims flock to Saudi Arabia from all over the world to participate in the annual Hajj. The extreme climate environment and tidal demand for passenger transportation not only put forward strict requirements on operating vehicles, but also bring great challenges to local passenger transportation services. Transformation and upgrading are imperative.
Saudi Arabia car market characteristics
Market position | Brand | Product | The market share
Market leader | Toyota | Corolla, Camry,Land cruiser， Prado | 57%
Market challenger |Hyundan |Sonata and elantra |30%GM
Market followers | Chevrolet Honda Ford VW |Explorer,Accord, Mondeo,Passat |13%