According to a report by GLOBE NEWSWIRE, the automotive sales market in Saudi Arabia is estimated to be $19.72 billion in 2023, and it is projected to reach $74.74 billion by 2032, with an impressive annual growth rate of 16.13%.
This market showcases immense potential, driven by governmental initiatives and economic diversification efforts. The Saudi Vision 2030 aims to reduce dependency on oil and promote growth in the automotive sector, with a focus on local manufacturing and innovation.
The government has invested over $5 billion in the development of local automotive production facilities and has partnered with global manufacturers such as Lucid Motors and Hyundai.
By 2025, Saudi Arabia aims to produce over 300,000 vehicles annually, creating more than 27,000 jobs. The expanding middle class, with an average disposable income of $25,000, represents a large consumer base for new car sales.
Emerging trends include a strong shift toward electric and hybrid vehicles, fueled by environmental concerns and government policies that promote sustainability.
The Saudi Green Initiative aims to reduce carbon emissions by over 130 million tons by 2030, with the transport sector playing a crucial role. Plans to install 5,000 electric vehicle charging stations nationwide by 2025 will further support this transition.
Sales of electric vehicles have significantly increased, with over 5,000 units sold in 2023 compared to just 500 units in 2020. Investments exceeding $1 billion in autonomous driving research and development highlight the state's commitment to technological advancement.
There is also a notable demand in the automotive sales market for light commercial vehicles due to the rapid growth of e-commerce and logistics services. The value of the Saudi e-commerce market is estimated to exceed $8 billion in 2023, necessitating the expansion of delivery fleets.
Over 70,000 light commercial vehicles were sold in 2023 to meet this demand. The easing of vehicle import regulations has opened the market to a variety of international models, enhancing consumer choice.
Additionally, the influx of over 10 million tourists and pilgrims annually is increasing the demand for transport services, boosting sales in the commercial vehicle sector.
Currently, dealership networks dominate the retail automotive market in Saudi Arabia, significantly outperforming online retail platforms. Traditional dealerships have established a strong presence nationwide, providing tangible purchasing experiences and having a deep-rooted history with Saudi consumers.
With hundreds of certified dealerships operating across the country, accessibility is a key factor, allowing customers to easily visit showrooms to explore a wide range of models and brands.
