The Saudi Arabian automobile market (page 1 of 2)

Do we know how many vehicles each household owns? How old are their vehicles? How many were bought new and how many second hand? Which countries brands are popular?

To answer questions like these and more TNS Middle East conducted a large scale, 6,000 sample size, syndicated study in Saudi Arabia in 2006.

Firstly, every household has on an average, 1 passenger vehicle. This is true across urban, provincial, and rural Saudi Arabia. Sedans are the most popular passenger vehicle (75%) followed by 4 wheel drive (4X4s) vehicles (20%) with ownership of 4X4s higher in rural areas (27% own a 4X4)

But how old are the vehicles in Saudi Arabia? The average age of vehicles is 6.4 years with 42% of vehicles manufactured in 2001 or later.



Saudi Arabia has a big second hand market - close to half (~46%) of the vehicles owned were bought second hand. Given that the average age of vehicles is 6.4 years, vehicles bought second hand were 2000 models or older. Models bought new were made from 2001 onwards.



So what separates the new vehicle buyer from the second hand buyer? Money! Those who bought their vehicles new were from more affluent households.



Let us look at what are the popular new models and the popular second hand models.

New Vehicles

Japanese brands lead with close to two-thirds of the market followed by American brands (~30%). European and Korean brands account for less than 10% each. In terms of growth, the Japanese and the Korean brands are the only ones to have grown over time with Korean brands having doubled their share over the last decade from 3.1% to 8.5%. Share of American and European brands have declined over time.



But is the above true across the key markets of Riyadh, Jeddah and Dammam which account for close to 65% of all new vehicles sold in Saudi Arabia? No, American brands are more popular in Dammam than in Riyadh and Jeddah. European brands are stronger in Riyadh vis-à-vis the other key markets, while Korean brands are stronger in Riyadh and Jeddah but weaker in Dammam.



Moving away from key markets information to profiling people who buy these vehicles, how different are those who buy American brands from those who buy other brands?

American brands are owned by larger local households while European brands are bought by relatively smaller local households. Korean brands are bought by people with lower education levels and incomes.

Second hand vehicles

Here we will only look at the models bought second hand from 2001 or older as this will indicate what are the current popular models. Japanese brands dominate the landscape but have a relatively lesser share as compared to when bought new (half vs. two-thirds). American and European brands perform better among second hand vehicles than when bought new. Korean brands do not perform that well in the second hand market.



The top 3 cities i.e.