KSA is already the largest market for new and used cars as well as car parts in the Gulf region and the Middle East, thereby having ample growth opportunities for Auto Finance industry in the country.
KSA Automotive Market Overview: Saudi Arabia is the largest car market in the GCC which includes Bahrain, Kuwait, Oman, Qatar and UAE. KSA is already the largest market for new and used cars as well as car parts in the Gulf region and the Middle East. KSA imports vehicles and parts worth $21 Mn every year. Three major global OEMs producing Heavy Duty Commercial Vehicles are operating in the Western Region which are Mercedes, Volvo and MAN.
Global shortage of semiconductors and COVID Impact: The credit disbursed market fell and experienced a downfall due to factors like Covid outbreak and semiconductor chip shortage. Covid impacted the production in the market, car manufacturers couldn’t predict the vehicles demand in the future and hence miscalculated the production requirements. The lack of supply of vehicles was pronounced even more due to a global shortage of semiconductors chips. The semiconductor chip shortage is expected to cost the global automotive industry $110 billion in revenue in 2021.
Impact of Increasing Prices: The fuel prices are increasing in the KSA region and the car prices are increasing too. Saudi Arabia is a spending economy hence people are highly leveraged that might give way to 5-year loans. In a competitive market such as Auto Finance, the interest rates are usually similar across different companies. Thus, car buyers are on constant lookout for higher value addition while selecting a vendor. Two wheelers constitute sports bike like BMW, Harley Davidson, Suzuki etc.
Issues and Challenges in KSA Auto Finance Industry: Often high amount of paperwork is required for a salesperson and customer to complete an average car loan application in KSA. The KSA government also implemented the Expat Levy in 2017 that mandated expatriates to pay SAR 100 per month for each of their dependents in order to renew their visas, and this fee kept rising. Due to the expat levy, many expatriates leave the country or send the family members home affecting the overall market for vehicles and auto finance.
Analysts at Ken Research in their latest publication “KSA Auto Finance Market Outlook to 2026F-Driven by Women Entering the Market, Growing Private Entities and Initiatives by the Government” by Ken Research observed the potential of Auto Finance Market Outlook in KSA. The rising Auto Finance consciousness among the population, along with increasing loan facilities, customer taste and preference, implementation of favourable government rules & regulations is expected to contribute to the market growth over the forecast period. The KSA Auto Finance Market is expected to grow at 6.6% CAGR over the forecasted period 2021-2026F.
Key Segments Covered:-
KSA Auto Finance
By Type of Lenders
Banks
NBFC
OEMS/Captives
By Type of Motor Vehicle
Passenger
Commercial
By Type of Commercial Motor Vehicle
HCV
MCV
LCV
By Type of Passenger Motor Vehicle
4W
2W
By Type of Vehicle Financed
New
Used
By Tenure of Loan for New Vehicles
1 Year
2 Year
3 Year and more
By Tenure of Loan for Old Vehicles
1 Year
2 Year
3 Year and more
Key Target Audience:-
KSA Auto Industries
Government Bodies & Regulating Authorities
Finance Industry
Car company
Automobile dealer and users
Time Period Captured in the Report:-
Historical Year: 2018-2021
Base Year: 2021
Forecast Period: 2022– 2026F
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Companies Covered:-
Al Rajhi Bank
Riyad Bank
National Commercial Bank
Abdul Latif Jameel
Arab National Bank
The Saudi Investment Bank
Emirates NBD
Saudi Finance Company
Al Amthal Financing Company
Alinma Bank
Key Topics Covered in the Report:-
KSA Automotive Market Overview
Landscape of Total Number of Cars in KSA Automotive Market, 2021-2024F
KSA Automotive Finance Market Overview
Ecosystem of KSA Auto Finance Market
KSA Auto Finance Market Evolution and Business Cycle
KSA Auto Finance Market Size, 2018-2021
KSA Auto Finance Market Segmentation, 2021 (By Type of Vehicle Financed, By Tenure of New and Old Vehicles, By Type of Commercial Vehicle, Type of Lending Bank and By Type of Lenders)
Industry Analysis of KSA Auto Finance Services
Decision Making Parameter for Selecting Car Loan Vendor
Trends and Developments in KSA Auto Finance Industry
SWOT Analysis of KSA Auto Finance Industry
Issues and Challenges in KSA Auto Finance Industry
Government policies affecting the KSA Auto finance Industry
Covid-19 Impact on the KSA Auto Finance Industry
Competition Framework for KSA Auto Finance
Future Outlook and Projections of the KSA Auto Finance Market, 2021-2026F
Market Opportunities and Analyst Recommendations
Analyst Recommendations
Research Methodology
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