The automotive market in Saudi Arabia has experienced a consistent increase, capturing a significant portion of car sales in the Gulf Cooperation Council and establishing itself among the top 20 global markets. The Kingdom imported an impressive 93,300 cars in 2023, marking a significant increase from the previous year’s 66,900 imports and solidifying its position in the automotive industry.
This surge in car imports has brought the total number of cars imported in 2022 and 2023 to 160,000, with major contributors being Japan, India, South Korea, the US, and Thailand. However, alongside these positive figures, there are lingering questions about the vehicle preferences of consumers in Saudi Arabia and the factors that influence these preferences. Furthermore, what considerations guide buyers when making a purchase decision? These queries have yet to be fully addressed.
The vehicle preferences of Saudi consumers reflect a delicate balance between practicality and lifestyle aspirations. Aly Hefny, show manager at Automechanika Riyadh, emphasized a demand for durable vehicles tailored to navigate the country’s varied terrain and climatic conditions. Saudi consumers prioritize comfort, reliability, and status in their vehicle choices, while also taking into account environmental impact and technological advancement. This is indicative of a growing interest in environmentally conscious options and technological innovations, such as electric and hybrid vehicles.
Karim Henain, partner at Bain & Co., notes that Saudi consumer preferences for new vehicles align increasingly with those in Western markets, with a growing demand for advanced connectivity, infotainment systems, and driving assistance technologies. Matthias Zeigler, managing director of Volkswagen Middle East, highlighted how there is a clear trend towards SUVs, particularly for larger 7-seater models that align with the strong emphasis on family transportation in the region. Despite sedans still being present in the market, the popularity of SUVs is on the rise, indicating a distinct perspective compared to other markets.
In terms of purchase factors, a survey conducted by Bain & Co. reveals a pronounced focus on running costs, with fuel and maintenance overshadowing other considerations, particularly among the younger demographic. Charging infrastructure for electric vehicles emerges as a crucial consideration, eclipsing concerns over driving range and speed.
The National Automotive and Vehicles Academy, along with the Automotive Manufacturers Association, play pivotal roles in guiding the Kingdom’s automotive narrative. The AMA’s formation as a united industry front presents a valuable opportunity to advocate for streamlined regulations, ensuring fair competition and fostering a more conducive environment for growth.
Saudi Arabia is well-positioned to embrace its sustainability goals while delivering top-tier automotive solutions, with organizations such as the NAVA and AMA playing crucial roles in ensuring the success of the nation’s automotive and mobility sector. The industry is on a trajectory towards high standards and automotive innovation, with a strong emphasis on technological advancements and environmental stewardship.
With close collaboration between automotive stakeholders, government institutions, and industry associations, the automotive market in Saudi Arabia is set to meet the evolving preferences of consumers and drive the sector towards a future focused on efficiency and sustainability. This collaborative effort will undoubtedly contribute to the overall growth of the automotive sector in the Kingdom.