Increase In Number of Women Drivers Is Set to Drive Used Car Market In Saudi Arabia: Ken Research
Introduction
A used car is the second-hand vehicle that is accessible for resale. Several outlets such as franchise and independent car dealers, auctions, rental car companies, private party sales and leasing offices sell used cards.
Report Analysis
According to the report analysis, ‘Saudi Arabia Used Car Market Outlook to 2025- By Market Structure (Organized & Unorganized), By Type of Car (Sedans & Hatchbacks, SUVs & Crossovers, Pick-ups and Luxury), By Brand (Toyota, Hyundai, GMC & Chevrolet, Ford and Others), By Type of Sourcing, By Age of Vehicle (Less than 1 year, 1-3 years, 3-5 years & More than 5 years), By Kilometers Driven (Less than 50,000 Km, 50,000-80,000 Km, 80,000-120,000 Km & More than 120,000 Km) and By Region (Northern, Southern, Central, Eastern and Western)’ states that the used car industry in Saudi Arabia has augmented at a CAGR of 0.8% on the basis of gross transaction value over the duration 2014-2019 and deducted at a CAGR of -2.4% on the basis of sales volume. The departure of expats from the country and the economic instability underwritten to the decline in sales throughout 2016-2017. The addition of women drivers and the high levels of disposable income in the country are one of the foremost growth drivers of the industry. Boom in the number of online auto-classified platforms and the traction of the customers towards online platforms is underwriting to the inclining used car sales around the country.
Market Segmentation
By Market Structure: The industry in Saudi Arabia is greatly unorganized owing to the preference of customers towards peer-to-peer sales, greatly facilitated by online auto-classified platforms. The organized market entails of large authorized brand dealerships as well as multi-brand outlets and exhibitions.
By Car Brands: Toyota continues to register the used car market in Saudi Arabia owing to higher preference of the customers towards the brand for its reliability and low maintenance. Also, the easy accessibility of spare parts and greater residual value of Toyota cars underwrites to the higher sales. Hyundai underwritten the second highest sales volume during 2019.
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By Age of Vehicle: Three- to five-year-old used cars were witnessed to register the used car sales in the country during 2019. As the installment duration for cars purchased on finance is nearly 3-5 years after which individuals usually prefer to sell off their cars. 1–3-year-old vehicles underwritten the second highest sales volume as great number of these cars found their manner to the used car market when car rental companies de-fleet their prevailing fleet.
By Regions: The central region involving the capital of Riyadh registered for the greatest number of used car sales in the country during 2019 owing to the concentration of young working population across the region. The western region underwritten the second highest used car sales. Most of the foremost authorized dealers have several showrooms in these regions.
Future Outlook
The used car industry is projected to recover from the Covid-19 pandemic and observe growth by 2025. The growing demand from smaller cities such as Jazan, Arar among others is predicted to propel the growth of the industry. The increasing traction towards online platforms is projected to compel dealerships to enlarge their existence online. Online platforms are projected to leverage latest technologies such as artificial intelligence & virtual reality to improve user browsing experience. The complete used to new car sales ratio in the country is also projected to improve during the future.
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