Mena's used car market set for solid growth by 2026
CONSUMER NEWS
The used car market in the Middle East and North Africa region is poised for solid growth over the next five years registering a CAGR of 6 per cent until 2026, said a report by
TechSci Research, a research based global management consulting firm.
Growing preference for luxury cars as well as need for personal transportation coupled with the growth of middle income group population is expected to boost the growth of used car sales in Mena countries, it stated.
According to TechSci Research, executive employees in Mena countries are mostly expats and hence, they prefer a non-expensive used car for personal transportation.
Saudi Arabia and Iran are the two most contributing countries to the Mena used car market. Recently, the removal of ban from women drivers in Saudi has resulted in an increase of women drivers. Moreover, opting for self-driving gives many women a sense of empowerment.
Many women are learning to drive and are hitting Saudi roads with four-wheelers and several women with foreign licenses have already obtained Saudi driving licenses.
All the above factors are expected to increase the sales of used four-wheelers in Saudi Arabia, which in turn is further going to boost the used car market in Mena.
It has been observed that Saudis use their car for a range of activities including daily commuting to schools, offices and shopping. Long-distance travelling and desert safaris are preferred weekend getaways for them, said the report.
Toyota, Nissan, Mazda are among the most preferred brands in Saudi Arabia, and models like Toyota Camry, Toyota Land Cruiser, Toyota Vitz, Nissan Sunny, Mazda Atenza, etc. are popular among used car customers of Saudi Arabia, it added.
According to TechSci Research, majority of used car sales come from Iran, Saudi Arabia and UAE, all highly oil driven economies, with Saudi Arabian oil and gas sector roughly accounting for 42% of the country’s GDP in 2019.
As a result, the price of petrol/gasoline is comparatively cheaper than other countries in the world. Owing to cheaper petrol/gasoline price and lower vehicle maintenance costs, the Mena used car market was highly dominated by the Petrol/Gasoline segment last in 2020, registering a market share of more than 85% in terms of used car units sold across the region, it stated.
“Abdul Latif Jameel IPR Company dominated the market in the year 2020, due to its remarkable dealership network, which offers a wide range of economical yet qualitative products with attractive scheme benefits to its customers as well as withstanding government’s safety and emission norms," noted Karan Chechi, Research Director with TechSci Research, .
"The demand for used cars is anticipated to increase globally in the coming years, on account of growing new car sales and this trend will likely contribute to the market growth," he added.-TradeArabia News Service
