Market Trends of Saudi Arabia Used Car Industry
This section covers the major market trends shaping the Saudi Arabia Used Car Market according to our research experts:
Hatchback Segmented to Gain Momentum
Any car that has been prior owned and is now being resold through a private seller, classified ads, or local dealers without undergoing a thorough vehicle inspection test by experts is considered a used car. On the other hand, a certified pre-owned (CPO) car vehicle has previously been extensively inspected (pre-purchase inspection) and reconditioned properly to perfection by professionals.
Owing to the affordability of hatchbacks, the sales of this segment of the used car market were least disrupted during the global pandemic. Hatchbacks are popular for a variety of reasons, including lower taxation than sedans while providing the same performance and comfort. Furthermore, because there are so few new models that qualify for these tax breaks, the price of used hatchbacks remains unaffected. When it comes to secondhand hatchbacks, these vehicles are an appealing alternative to the LCGC and LMPV kinds often utilized by Saudi Arabia consumers.
Popular used hatchback in Saudi Arabia include Volkswagen Golf GTI, MINI Cooper, Renault Zoe, Suzuki Swift Sports, Kia Rio, Peugeot 308, and others. These cars are gaining monetum in the market owing to their affordable prices, bodystyle and offered fuel economy. Hatch back offer better fuel economy compared to sedan and SUV. These car fit perfect for nuclear and middle-class economy family who look for better budget car.
With changing consumer preferences in terms of fuel economy, cost, and overall maintenance benefits, demand has been witnessing immense growth for the adoption of the used hatchback. today a diverse range of hatchbacks are on the Saudi Arabia market.
Online Sales Channel to Play Key role in the Market
Growing internet penetration and expanding online dealer network for a used cars have elevated the overall used car market demand in Saudi Arabia. Presently more than 85% of Saudi Arabia's population own the internet in their homes with 80.9% of people in 2019 having smartphones. The data resonates with strong potential for online sales channels to sell a used cars. In addition, this has motivated players to shift their business model from offline shops to online business models to provide an easy and hassle-free experience to their customers.
Many multi-brand and independent dealerships are expected to develop their online presence in order to participate in the online used vehicle market. Some dealerships are investing in their own websites and Instagram pages in addition to advertising used car inventory on internet marketplaces. For example, companies like YallaMotor, OLX Saudi Arabia, CarSwitch, Hatla2ee, Expatriates etc. are seen to drive the majority of used car sales which are featured online.
Moreover, keeping consumer needs are preferences, these online used car selling companies showcase a wide variety of cars including sedans, hatchbacks, SUV, and MUVs with filters so that buyers have hassle-free options when choosing the car model. In addition, online companies offer discounts, post-purchase maintenance assistance and service. In addition, after COVID-19 many people avoid having store visits to stop the spread of the virus inspection. Thus these companies offer them an online virtual tour of the car fleet to get a combined idea of all the features, models, and colours.
Considering these prime factors, demand for online sales channel is expted to gain traction during forecast period.
