90% of Credit Disbursed In KSA Auto Finance Market Is Contributed By New Car Segment Because Of the Trend To Change Car Every 5 Years: Ken Research

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.

ksa-auto-finance-market

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

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