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A general view of the car market as people gather to buy vehicles before the expected increase of VAT to 15% in Riyadh, Saudi Arabia June 27, 2020.Mohammed bin Mansour . REUTERS. Image used for illustrative purpose.
Riyadh – The used car industry in Saudi Arabia is expected to register a compound annual growth rate (CAGR) of 4.5% on the basis of gross transaction value during the period from 2019 to 2025, according to a recent paper by Ken Research.
The used car market in Saudi Arabia had witnessed a recovery in 2019 and an improvement in the used to new car sales ratio. The industry's growth over the coming years is expected to be backed by increasing value-added service offerings, a rising presence of dealerships online, and other factors.
During the COVID-19 lockdown, the Saudi Traffic Department enabled the online transfer of ownership or cars sles to facilitate the transactions without requiring a periodic technical inspection. This move will likely facilitate the sale of used cars for both buyers and sellers.
The used car industry in the Kingdom needs a shift towards online platforms to reach more consumers. “Along with listing of used car inventory online, some dealerships are planning to develop e-commerce platforms to sell used cars and to enable 100% online end-to-end transactions from the convenience of the homes without having to visit the showrooms,” Ken Research showed.
As for the type of vehicles, there has been an increasing demand for sport utility vehicle (SUVs) and crossovers across Saudi Arabia. This is attributed to those vehicles being suitable for climatic conditions in the country and having a relatively longer ownership period.
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