Trade Shows

Saudi Arabia’s Automotive Sector Set For Rapid Transformation

Saudi Arabia’s automotive ecosystem is set for a rapid transformation in the coming years, with 20 per cent of the female population, or three million drivers, expected to be added to the Kingdom’s roads by 2020, according to a recent whitepaper.

An October 2018 report said the June 2018 lifting of the ban on women driving in Saudi Arabia, along with recovering oil prices and economic policies aimed at boosting consumer spending, will result in an eight per cent per year increase of passenger vehicles sales until 2022.

The whitepaper, published by global research company Aranca, added that in addition to new car sales, the positive impact of a new customer segment over the next one to three years will be felt in the Kingdom’s automotive aftermarket, which was valued at US$7.4 billion in 2017.

According to Aranca, the Saudi Arabian car parc stood at 7.3 million in 2017, with 438,000 new passenger cars and 110,000 new commercial vehicles sold for the year. Tyres accounted for the greatest slice of revenue in the Saudi spare parts market, with a 30 per cent share in 2017 (US$2.2 billion), followed by lubricants (US$1.4 billion), batteries (US$400 million), and other components (US$3.4 billion).

Aranca’s whitepaper was published ahead of Automechanika Jeddah 2019, the only dedicated trade show for the automotive aftermarket and service industry in the Kingdom’s western region. The third edition of the three-day event will take place from 26-28 February 2019 at the Jeddah Centre for Forums and Events, with more than 150 exhibitors from 20 countries locked in for the show, awaiting fresh opportunities. Many of these opportunities will likely arise in Saudi’s western regions of Madinah and Makkah, where more than one million women are expected to get behind the wheel by 2020.

The whitepaper further said that key industry players are already taking initiatives to capitalise on opportunities created by women being allowed to drive, including the creation of women-only car showrooms, automotive insurance claims centres and driving schools dedicated to women.

Meanwhile, the rising car parc is setting the stage for solid growth in the Kingdom’s aftermarket. Aranca said 10 million vehicles will ply Saudi roads by 2022, including 6.5 million passenger vehicles and 3.5 million commercial vehicles. As a result, demand for spare parts and related automotive services will grow six per cent annually, reaching a value of US$9.8 billion in 2022.

A market ripe with opportunity will be underlined by the 3rd edition of Automechanika Jeddah, which is co-organised by Dubai-based Messe Frankfurt Middle East and Saudi-headquartered ACE Exhibitions.

“Consumption of auto spare parts and services in Saudi Arabia will grow at a healthy rate in the coming years, aided by the addition of a whole new segment of the population that is now allowed to drive,” said Mahmut Gazi Bilikozen, Automechanika Jeddah’s Show Director.

“Longer warranty periods, growing vehicle parc, and environmental factors that lead to high wear and tear on car parts also provide added impetus in the auto aftermarket, with Automechanika Jeddah 2019 presenting an unrivalled platform for global suppliers to tap into emerging opportunities.”

The international presence at Automechanika Jeddah 2019 will be underlined by five country pavilions from Germany, the USA, Turkey, Korea and China. The trade show is expected to attract more than 4000 Saudi trade visitors, as they seek solutions across seven product groups: Parts & Components, Electronics & Systems, Accessories & Customizing, Repair & Maintenance, Dealer & Workshop Management, Car Wash, Care & Reconditioning, and Tyres & Batteries.

The show will also feature the Truck Competence initiative, where more than half of the exhibitors will showcase their products dedicated to the entire value chain in the truck sector, from truck parts and accessories, to workshop equipment, body repair and care.

Aranca’s Saudi automotive aftermarket whitepaper is available to download on the Automechanika Jeddah’s website at www.automechanikajeddah.com.