New customer segment and vehicle parc a big boost for Kingdom’s aftermarket as countdown begins to Automechanika Jeddah 2019
22 October, 2018, (AETOSWire) : Saudi Arabia’s automotive ecosystem is set for a rapid transformation in the coming years, with 20 percent of the female population, or three million drivers, expected to be added to the Kingdom’s roads by 2020, a recent whitepaper stated.
An October 2018 report said the lifting of the ban on women driving in Saudi as of June 2018, along with recovering oil prices and economic policies aimed at boosting consumer spending, will result in an eight percent per annum increase of passenger vehicles sales until 2022.
The whitepaper, published by global research company Aranca, added that in addition to new car sales, the positive impact of a new customer segment over the next 1-3 years will be felt in the Kingdom’s automotive aftermarket, which was valued at US$7.4 billion in 2017.
According to Aranca, car parc (vehicles in operation), in Saudi Arabia stood at 7.3 million in 2017, with 438,000 new passenger cars and 110,000 new commercial vehicles sold for the year. Tires accounted for the greatest slice of revenue in the Saudi’s spare parts market, with a 30 percent share in 2017 (US$2.2 billion), followed by lubricants (US$1.4 billion), batteries (US$400 million), and other components (US$3.4 billion).
Aranca’s whitepaper was published exclusively ahead of Automechanika Jeddah 2019, the only dedicated trade show for the automotive aftermarket and service industry in the Kingdom’s western region. The 3rd edition of the three-day event will take place from 26-28 February at the Jeddah Centre for Forums and Events, featuring more than 150 exhibitors from 20 countries awaiting fresh opportunities.
Many of these opportunities will likely arise in Saudi’s western regions of Madinah and Makkah, where more than one million women are expected to get behind the wheel by 2020.
The whitepaper further stated that key industry players are already taking initiatives to capitalise on opportunities created by women being allowed to drive, including the creation of women-only car showrooms, auto-insurance claims centres and driving schools dedicated to women.
Meanwhile, rising vehicle parc is setting the stage for solid growth in the Kingdom’s aftermarket. Aranca said 10 million vehicles will ply Saudi roads by 2022, including 6.5 million passenger vehicles and 3.5 million commercial vehicles. As a result, demand for spare parts and related auto services will grow six percent annually, reaching a value of US$9.8 billion in 2022.
A market ripe with opportunity will be underlined by the 3rd edition of Automechanika Jeddah, which is co-organised by Dubai-based Messe Frankfurt Middle East and Saudi-headquartered ACE Exhibitions.
Mahmut Gazi Bilikozen, Automechanika Jeddah’s Show Director, said: “Consumption of auto spare parts and services in Saudi Arabia will grow at a healthy rate in the coming years, aided by the addition of a whole new segment of the population that is now allowed to drive.
“Longer warranty periods, growing vehicle parc, and environmental factors that lead to high wear and tear on car parts also provide added impetus in the auto aftermarket, with Automechanika Jeddah 2019 presenting an unrivalled platform for global suppliers to tap into emerging opportunities.”
The international presence at Automechanika Jeddah 2019 will be underlined by five country pavilions from Germany, the USA, Turkey, Korea and China.
The Turkish Pavilion comes with the support of the Uludag Automotive Industry Exporters’ Association (OIB), the sole export representative of Turkey’s automotive industry. Ugur Aslantas, from OIB, said its Turkish exhibitors have over the last three years gained a solid understanding of the expectations and needs of Saudi’s aftermarket via their participation at Automechanika Jeddah.
“The Saudi market is very attractive for our pavilion members and they’ve increased their sales due to their participation at Automechanika Jeddah,” said Aslantas. “The market is also growing more mature with an increasing demand for sophisticated know-how products.”
US Global Petroleum is another international exhibitor at Automechanika Jeddah 2019, and will showcase its various branded products of motor oils, transmission fluids, hydraulic and gear oils, and grease.
Iyad Assaf, US Global Petroleum’s Vice President of Sales, said: “US Global Petroleum is a manufacturer and global distributor of API (American Petroleum Institute) licensed quality lubricants, hydraulics and chemicals. We expanded in 2011 by acquiring the Conoco Phillips plant in Franklin Park, Illinois, and since have enjoyed rapid business growth in the field of petroleum engineering.