Report Overview

Saudi Arabia Used Cars Market is flourishing owing to the increasing preference of consumers for vehicle ownership, rising disposable income, and the wide availability of quality as well as affordable used cars in the market...

Report Overview

Saudi Arabia Used Cars Market is flourishing owing to the increasing preference of consumers for vehicle ownership, rising disposable income, and the wide availability of quality as well as affordable used cars in the market.

Saudi Arabia Used Cars Market - Industry Trends & Forecast Report 2028

Saudi Arabia Used Cars Market is anticipated to grow at a CAGR of 5.2% during the forecast period (2022-2028). The market is growing steadily at a high rate owing to the weaker economic sentiment and financial constraints due to the COVID-19 pandemic. This shifted consumers' preference toward used cars. Thus, consumers are preferring affordable pre-owned vehicles rather than spending hefty sums on purchasing new cars. Also, Saudi Arabian residents prefer to travel in their own cars for performing daily activities and traveling long distances for relaxation purposes.

Saudi Arabia Used Cars - Overview

Saudi Arabia used cars provide a variety of used cars. Used cars are a second-hand vehicle that has been previously owned and is now for sale. Buying used cars leads to easy access to financing options, annual maintenance contracts, and lower entry prices. The used cars market is also a convenient way for first-time drivers and those looking for a good car in an affordable price range. Many E-commerce platforms in Saudi Arabia have a huge availability of various used cars for selling.

Saudi Arabia Used Cars Market Forecast and Trends

Growth Drivers

Shifting Preference toward Online Platforms

Many E-Commerce platforms like Haraj, Motory, Syarah, SaudiSale, and Abi Sayara have introduced the facility for selling a variety of small, mid-size, and luxury used cars. This move is expected to facilitate used car sales in the future due to increased ease for buyers and sellers. Moreover, many Saudi dealerships are developing online platforms to sell used cars and to enable 100% online end-to-end transactions without visiting the showrooms. This aids to fuel the growth of Saudi Arabia Used Cars Market during the forecast period (2022-2028).

Expanding Integration of Advanced Technologies

The online platforms and dealerships are expanding their business. They are implementing the latest technologies such as 360 degrees 3D view of the interiors and exteriors to enhance the consumer experience. Also, to provide more insightful data to make smart decisions before buying used cars. Moreover, the integration of advanced technologies like the Internet of Things (IoT) and artificial intelligence (AI) gathers customer data and aims to allow market players in making appropriate marketing decisions to increase the sale of used cars.

Restraints

Increasing Fuel Prices and Tripling of VAT Rates

The continuously increasing fuel prices raise concerns among consumers about buying cars and declining demand for the used cars market. Also, the high vehicle insurance rate negatively impacted the used car sales over the review period. Moreover, effective July 1, 2020, Saudi Arabia hiked its value-added tax (VAT) rates from 5% to 15%, as a part of measures to address the fiscal imbalance between public revenues and expenditures. This tripling of VAT rates in Saudi Arabia hampers the demand for a used cars. 

Impact of COVID-19 on Saudi Arabia Used Cars Market

The sudden outbreak of COVID-19 minimally impacted the growth of Saudi Arabia Used Cars Market. This is because the sales and production of new vehicles were hindered due to the pandemic, and consumers started adopting used cars. Due to the lack of new cars from auto plants, the used car sales boomed in the market.  Also, the economic crisis offers a lucrative growth opportunity in the used car market. As several people were looking for vehicles at affordable prices, which results in surging the demand for used cars in the country, propelling the overall market growth.

Saudi Arabia Used Cars Market - By Structure

Based on structure, Saudi Arabia Used Cars Market is segmented into Organized and Unorganized. The organized segment accounts for the largest market share owing to the rising implementation of new technologies such as blockchain to store and maintain. Also, the organized players can provide various services by offering used cars, such as towing services at the dealership.

Saudi Arabia Used Cars Market - By Car Type

Based on car type, Saudi Arabia Used Cars Market is segmented into Hatchback, Sedan, SUVs, Pick-ups and Luxury, and Others. The luxury segment dominates the market. Since it is not easy to buy a new luxury car due to its high cost. So, consumers prefer to buy used luxury cars for their comfort. This drives the growth of Saudi Arabia Used Cars Market during the forecast period (2022-2028).

Saudi Arabia Used Cars Market - By Age of Vehicle

Based on the age of the vehicle, Saudi Arabia Used Cars Market is segmented into Less than 1 year, 1-3 years, 3-5 years, and more than 5 years. The segment of less than 1 year dominates the market. The average age of luxury used vehicles coming into the market is between 1-2 years, compared to 3-5 years for mid-size, and more than 5 years for small vehicles. This makes a better option for adopting luxury used cars and reinforces the market growth.

Saudi Arabia Used Cars Market - Regional Insights

Geographically, Saudi Arabia Used Cars Market is segmented into Northern and Central, Southern, Eastern, and Western. The Central region segment is anticipated to dominate the market owing to the large proportion of the working population in the region. Also, the expanded business hub, urbanization, and most large brand-authorized dealers have multiple showrooms in this region. That plays a crucial role in fueling the demand for Saudi Arabia Used Cars Market during the forecast period (2022-2028).

Competitive Landscape

The leading market players in Saudi Arabia Used Cars Market are Abdul Latif Jameel Motors, Aljomaih Automotive Company Ltd., Al Jazirah Vehicles Agencies Co., Universal Motors Agencies Ltd., Mohamed Yousuf Naghi Motors Co., United Motors Company, Gulf Advantage Automobiles LLC, Haraj, Motory, Syarah, SaudiSale, and other prominent players.

The market is highly competitive and fragmented with the presence of various global as well as regional industry participants. The companies constantly launch new products with advanced features to gain a competitive edge over the market. Multinational corporations also invest in expanding their production capacities to meet the growing demand and boost their market penetration. Furthermore, the adoption of competitive strategies such as partnerships, mergers, acquisitions, joint ventures, etc., is also prominent in this market.

Recent Development

• The Saudi Traffic Department introduced the facility for online transfer of ownership for the sale of vehicles amidst the Covid-19 lockdown to enable transfer without requiring a periodic technical inspection.

Scope of the Report

By Market Structure

• Organized
• Unorganized

By Car Type

• Hatchback
• Sedan
• SUVs
• Pick-ups and Luxury
• Others

By Brand

• Toyota
• Hyundai
• GMC & Chevrolet
• Ford
• Others

By Type of Sourcing

• • Car-Rental/Leasing Companies (including Auctions)
  • Buy-Sell/Park-Sell
  • Imports
  • Trade-Ins

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

By Region

• Northern and Central
• Southern
• Eastern
• Western