The automotive market in Saudi Arabia is growing amid changing consumer preferences

RIYADH: Saudi Arabia’s automotive market surges ahead, dominating over half of the Gulf Cooperation Council’s car sales and claiming a place among the top 20 global markets.

The kingdom imported 93,300 cars in 2023, marking a significant increase from 66,900 the year before, Hamoud Al-Harbi, spokesman for the Zakat, Taxation and Customs Authority, revealed. This increase brings the total number of cars imported in 2022 and 2023 to 160,000, with major contributors including Japan, India, South Korea, the US and Thailand.

Despite the positive figures, lingering questions remain: What exactly are the vehicle preferences of UK consumers and what factors influence these preferences? Furthermore, what considerations guide buyers when making a purchase decision?

Furthermore, what roles do the National Academy of Automobile and Automotive and the Association of Automobile Manufacturers play in line with Vision 2030?

Driven by preference

Saudi consumers’ vehicle preferences reflect a nuanced interplay between practicality and lifestyle aspirations.

Aly Hefny, show manager at Automechanika Riyadh, a regional trade event for the automotive aftermarket industry highlights a demand for robust vehicles adapted to navigate the country’s varied terrain and climatic conditions.

“Saudi consumers prioritize comfort, reliability and status in their vehicle choices, while also including considerations for environmental impact and technological advancement,” Hefny told Arab News.

It further highlights the evolving mindset reflected in the growing interest in environmentally conscious options and technological innovations, such as electric and hybrid vehicles.

Additionally, Karim Henain, partner at Bain & Co., notes that Saudi consumers’ preferences for new vehicles are increasingly in line with those in Western markets. There is a growing demand for advanced connectivity, infotainment systems and driving assistance technologies such as advanced driver assistance systems, autonomous parking and 360-degree cameras, driven by the country’s tech-savvy youth.

There is a growing demand for advanced connectivity, infotainment systems and driving assistance technology. (Supplied)

Furthermore, according to Matthias Zeigler, managing director of Volkswagen Middle East, consumer preferences in the Kingdom present a unique perspective compared to other markets.

“While sedans remain present, a clear trend towards SUVs is evident, especially for larger 7-seat models that match the strong emphasis on family transportation within the region,” Zeigler told Arab News.

Inside Volkswagen, Zeigler revealed that their best-selling models in Saudi Arabia are the Teramont and T-Roc, “both known for their comfortable driving experience, spacious interiors and comprehensive feature sets.”

The managing director emphasized how these attributes resonate strongly with Saudi car buyers, who increasingly prioritize practicality and comfort for long trips and family outings.

“The upcoming new Tiguan is also expected to perform well in the market due to its continued focus on these key points,” asserted Zeigler.

He noted the growing interest in fuel efficiency as gasoline prices fluctuate.

“While not currently the main decision factor, cost of ownership is an aspect we are actively considering in developing future offerings for the Saudi market,” he explained.

According to Sami Malkawi, managing director of sales at Ford Middle East, customers in the Kingdom have a refined taste when choosing their next vehicle. While luxury sedans, such as the Ford Taurus, have long been popular, there is a marked increase in the popularity of small SUVs.

“Brands have responded to increased interest in this type of SUV, which offers practicality, power, interior space and ease of maneuverability in a smaller package – and buyers are spoiled for choice. In fact, there are currently more than 40 types of small SUVs available in this market,” Malkawi revealed.

The managing director emphasized that the company recognized the demand and launched Ford Territory in the region in November 2022.

“Just over a year later, the Territory was the Kingdom’s best-selling small SUV and Ford became the Kingdom’s fastest-growing brand. We are proud to see it come out on top in such a competitive category, which holds the interest of so many consumers and car brands.”

Shopping navigation factors

A Bain & Co. the survey reveals a marked focus on running costs, with fuel and maintenance overshadowing other considerations, particularly among younger demographics. This is in line with global trends, where operational affordability is essential.

“Interestingly, dealership service quality, highly rated in other markets, ranks lower among Saudi buyers, perhaps reflecting different expectations or experiences with after-sales services,” explained Henain.

Cost of ownership is an aspect we are actively considering in developing future offerings for the Saudi market.

Matthias Zeigler, managing director of Volkswagen Middle East

For electric vehicle enthusiasts, charging infrastructure appears to be the mainstay, eclipsing concerns over range and speed, underscoring the need for robust charging networks.

“Our survey further reveals distinct vehicle preferences across all age groups; SUVs are preferred by Saudis aged 35 to 65 for their versatility and capacity, while sedans are favored by the 25 to 34 age group for practicality and economy,” he said. Henain added that convertibles, coupes and hatchbacks are most popular among Saudi women.

Industry leading vision

The National Academy of Automobiles and Vehicles and the Association of Vehicle Manufacturers appear as key points in the Kingdom’s automotive narrative. NAVA’s mandate to nurture skilled talent aligns seamlessly with Vision 2030’s emphasis on human capital, while AMA advocates for regulatory coherence and industry growth.

Zeigler emphasizes the key role of collaboration between industry stakeholders and government institutions, pushing Saudi Arabia towards a mobility future underpinned by efficiency and environmental stewardship.

“NAVA’s focus on nurturing skilled talent aligns perfectly with industry’s need for a strong future workforce capable of driving innovation, aligning with Vision 2030’s emphasis on human capital,” it said. apparently he.

On the other hand, he added: “The formation of the AMA as a united front of the industry presents a valuable opportunity to advocate for simplified regulations, ensuring fair competition and fostering a more favorable environment for growth.”

These developments position Saudi Arabia to embrace its sustainability goals by offering high-end automotive solutions. Henain highlights NAVA’s role in bridging the talent gap and AMA’s efforts in fostering local manufacturing and maintenance capabilities.

“NAVA’s mandate is to address the local talent gap through specialized technical education programs tailored to the EV industry aimed at preparing a skilled workforce to meet the needs of local EV manufacturing,” he said. .

At the same time, he added, AMA will lead initiatives to raise awareness in local communities about the ambitions of the Saudi automotive sector and the need to build local capabilities in manufacturing and maintenance, all while protecting the interests of industry stakeholders.

Henain emphasized that similar organizations in countries that have developed their own automotive sectors have played an important role in ensuring the success of building the sector.

“I expect these entities to play an equally important role for the Kingdom’s automotive and mobility sector,” he said.

From Ford’s perspective, Malkawi emphasized the company’s close cooperation with Saudi authorities and associations to meet CAFÉ regulations and requirements.

“While I cannot comment directly on the exact role played by these bodies, I can speak to our commitment to drive high standards in the industry and push the boundaries of automotive innovation,” the managing director emphasized.

He justified Ford’s commitment to the continuous development of next-generation technologies that enhance safety, intelligence and driving, along with the integration of more sustainable practices and the latest advancements that contribute to the overall growth of the automotive sector.

Malkawi concluded by noting, “As the face of Ford in the Kingdom, our valued distributor partners play a critical role in ensuring that our customers enjoy an experience that is always improving, which translates into improved loyalty and, ultimately, growth in the automotive sector.”

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