Leading the Gulf Cooperation Council in automobile sales and securing a position amongst the world’s top 20 automotive markets, Saudi Arabia’s car industry is on a significant upward trajectory.
With 93,300 cars imported in 2023, the Kingdom has seen a substantial climb from the 66,900 vehicles brought in the previous year. This information was shared by Hamoud Al-Harbi, representative for the Zakat, Tax and Customs Authority. This boost raises the combined total for 2022 and 2023 to 160,000 vehicles, with significant imports coming from Japan, India, South Korea, the US, and Thailand.
Despite these impressive statistics, questions remain about the specific vehicle types that Saudi consumers prefer and the decision-making factors that influence their purchases. Additionally, the relevance of the National Academy of Vehicles and Cars and the Automotive Manufacturers Association in relation to Vision 2030 is also a topic of interest.
Driven by preference
Saudis select vehicles based on a combination of practical needs and personal aspirations. Automechanika Riyadh’s show manager, Aly Hefny, indicates that consumers look for cars that can handle the nation’s diverse landscapes and weather conditions, placing a premium on comfort, reliability, and prestige. Hefny also pointed out the rising interest in sustainable and technologically advanced vehicles, including electric and hybrid options.
According to Karim Henain of Bain & Co., Saudi consumers’ tastes in new vehicles align more closely with Western counterparts, with a notable demand for enhanced connectivity features, infotainment systems, and driving assistance technology, reflecting the preferences of the tech-savvy younger generation.
Matthias Zeigler, Volkswagen Middle East’s managing director, observes a unique trend in Saudi Arabia towards larger SUV models, especially 7-seaters, which cater to the region’s focus on family transportation. Volkswagen’s top sellers, the Teramont and T-Roc, are acclaimed for their comfortable rides and spacious interiors, pivotal factors for Saudi buyers. Zeigler also anticipates the new Tiguan to be well-received due to its alignment with these preferences and highlighted the increasing importance of fuel efficiency amidst fluctuating petrol prices.
Meanwhile, Sami Malkawi from Ford Middle East reports a rise in the popularity of small SUVs, with consumers having over 40 models to choose from. In response, Ford introduced the Territory, which quickly became the top-selling small SUV in the Kingdom, emblematic of the brand’s rapid growth.
Navigating purchase factors
A study by Bain & Co. indicates that for younger buyers, running costs such as fuel and maintenance are top concerns. However, dealership service quality, often a priority in other markets, is less critical for Saudi consumers, which may reflect varied after-sales service experiences. For electric vehicle enthusiasts, the availability of a reliable charging infrastructure is a deciding factor, taking precedence over concerns like driving range and speed.
Henain mentioned that preferences vary with age, with Saudis aged 35 to 65 favoring SUVs for their versatility, while those between 25 to 34 prefer sedans for their practicality. He also noted that convertibles, coupes, and hatchbacks tend to be more popular among female consumers in the Kingdom.
Steering industry vision
The National Automotive and Vehicles Academy and the Automotive Manufacturers Association are key players in shaping the future of Saudi Arabia’s automotive industry, in line with Vision 2030’s focus on human capital. Zeigler emphasized the importance of collaboration between industry and government to advance mobility, efficiency, and environmental goals.
Henain highlighted NAVA’s role in developing a skilled workforce for the emerging electric vehicle sector and AMA’s initiative in bolstering local manufacturing and maintenance capabilities, safeguarding industry stakeholders’ interests.
As Ford’s representative, Malkawi stressed the company’s collaboration with Saudi authorities to adhere to industry regulations and standards, underscoring their commitment to innovation and sustainable practices that contribute to the sector’s advancement.
Malkawi concluded by acknowledging the distributor partners’ essential role in enriching customer experiences, fostering loyalty, and propelling growth within the automotive industry.