GCC passenger car market to grow at 6.68% CAGR: report

GCC passenger car market, valued $26.23 billion in 2020, is projected to grow at CAGR of 8.73% in the next five years to reach $46.12 billion until 2026, according to TechSci Research report.

Growing disposable income, expanding road infrastructure coupled with lower cost of the fuel are the primary factors for the growth of the passenger car market in GCC.

In 2017, the ban on women driving was lifted in the Kingdom of Saudi Arabia and since then there is an increase in women drivers and hence the demand is witnessed to increase from this segment and is susceptible to propel the market in the forecast period as well.

The GCC passenger car market is majorly dominated by the UAE and the Kingdom of Saudi Arabia owing to better per capita earnings of the consumers in the region.

GCC passenger car market can be segmented based on vehicle type, fuel type, transmission type, end user and country. In terms of vehicle type, the sedan car segment accounts for the largest share but due to an increase in the service sector, demand for personal transportation is increasing and hence giving rise to the hatchback car segment.

Off-roading events are getting popularity among people and hence the demand for vehicles with higher engine capacity is growing in the gulf countries, which is expected to drive the sports utility segment at an impressive rate in the forecast period.

Based on fuel type the market is segmented across petrol, diesel and other alternative fuels or electrically powered vehicles. The prices of gasoline or petrol are very low as compared to other fuels and therefore ownership and running costs of petrol driven vehicles are comparatively less.

Hence, among these, petrol or gasoline powered vehicles are more popular among people belonging to GCC and this trend is susceptible to endure in the forecast period.

On the basis of passenger car sales by end user, individual owners are much more contributing as compared to fleet owners currently. However, the past few years have witnessed a substantial increase in the usage of taxi services like Uber and Careem, moreover police & government are also increasing their workforce and hence contributing to regions passenger car sales. Therefore, the trend of passenger car sales by end user is witnessed to be increasing in case of contribution by fleet owners, which is susceptible to be observed in the upcoming years as well. Companies across the region are also introducing safer, technologically advanced, and fuel-efficient passenger cars. Cars with automatic transmission account for the majority of share in the GCC passenger car market on account of ease of driving with stringent traffic rules across the region.

Toyota Motor Corporation, Nissan Motor Company, Ltd., Hyundai Motor Company, Mitsubishi Motors Corporation, Kia Corporation, etc., are among some of the leading players operating in the GCC passenger car market. Apart from these companies, other passenger car manufacturers are also increasing their brand awareness, price schemes and elevating

product portfolio in the region to increase their customer base. Major companies in the GCC passenger car market industry are also focusing on increasing their dealer and distributor network to grab a larger share in the regions passenger car market.

In 2020, the Kingdom of Saudi Arabia accounted for the largest share i.e., 54.27% in the GCC passenger car market. The country is expected to maintain its dominance over the next five years as well, but the UAE is giving neck to neck competition. Increase in partnerships with local dealers and distributors and expanding per capita income in the region is boosting demand for passenger cars in the UAE, said Karan Chechi, Research Director with TechSci Research, a research based global management consulting firm.-- Tradearabia News Service