KSA Automotive Aftersales Service Market: An In-depth Analysis: Ken Research

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In 2020, over 100 exhibitors from 12 countries showcased cutting-edge automotive aftercare products across six sections. The market is highly fragmented, with around 3,000-4,000 independent/unorganized workshops contributing to industry revenue.

STORY OUTLINE

• The Saudi Arabia automotive aftersales service market is expected to experience significant growth driven by increased sales of passenger vehicles and the rise of online automotive service providers.
• Longer vehicle lifespans resulting from the use of quality materials and manufacturing processes contribute to the growing demand for automotive repair and maintenance services.
• Road safety and environmental concerns are driving vehicle owners to seek regular maintenance and servicing, boosting the demand for aftersales services.
• E-commerce platforms and digitalization have revolutionized the market, allowing customers to conveniently compare prices, find spare parts, and access automotive services online.
• The market is expected to witness further expansion with the growing number of online service providers, offering opportunities for the automotive repair and maintenance services sector in Saudi Arabia.

The Saudi Arabia automotive aftersales service market is expected to experience significant growth with a strong CAGR from 2022 to 2027. Factors such as the rise of online automotive service providers and increased sales of passenger vehicles are driving the demand for automotive repair and maintenance services in Saudi Arabia.

1. Driving Market Growth: Increased Passenger Car Sales

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The sales of passenger vehicles in Saudi Arabia are experiencing a significant boost due to increased consumer spending capacity and a preference for private vehicle ownership. Longer vehicle lifespans, resulting from the use of quality materials and manufacturing processes, are driving the demand for automotive repair and maintenance services. The Saudi Arabian automotive repair service market reached a value of USD ~980 million in 2021, with market players focusing on providing flexible, affordable, and high-quality services to cater to the growing demand and gain a competitive edge.

2. Growing Concerns Drive Market Demand for Vehicle Safety

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With an increasing emphasis on road safety and environmental concerns, vehicle owners are more conscious of keeping their vehicles in optimal condition. Regular servicing and maintenance become crucial for ensuring safety, fuel efficiency, and reduced emissions, driving the demand for aftersales services.

From 2017, the Saudi Standards, Metrology and Quality Organization (SASO) mandated automobile manufacturers to adhere to stringent safety guidelines and measures for newly manufactured cars. Saudi Arabia has implemented over 480 standards, including 102 items pertaining to tires and spare parts, aligning with global regulations in the automotive industry as practiced in developed countries.

3. On the Fast Track: Online Channel Fuels Market Expansion

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E-commerce platforms and digitalization have revolutionized the automotive aftersales service market, offering convenient price comparisons, spare parts availability, and easy access to services, driving the growth of online providers. There were ~34 million internet users in Saudi Arabia in January 2022. Companies like Morni, Ezhalha offer roadside assistance services to customers and provide convenient access to quotes for automotive repair and maintenance services, garnering significant customer interest.

The growing number of market players offering services on online platforms is expected to create lucrative opportunities for the Saudi automotive repair and maintenance services market in the next five years. The commission charged by Ezhalha, a digital platform for car spa services, ranges from 15% to 20%. According to a report by Ken Research, the Saudi Arabia automotive crash repair market is projected to reach SAR ~2.5billion valuation by 2025, supported by factors such as increased passenger vehicle sales and the emergence of online service providers. The report highlights the rising demand for repair and maintenance services, driven by vehicle safety concerns and the convenience offered by e-commerce platforms. This growth potential underscores the opportunities in the market for industry players to capitalize on.

Wallan Trading and Renault Group Join Hands to Reshape the Future of Saudi Arabian Automotive Industry: Ken Research

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The Riyadh-based firm looks to expand its automotive offerings in the Kingdom. Riyadh-based Wallan Trading Co., a prominent player in the Saudi car market, has entered into a strategic partnership with Renault Group to become the official distributor of Renault vehicles in the Kingdom.

STORY OUTLINE

• Wallan Group partners with Renault Group as the official distributor for Renault in Saudi Arabia, marking a significant milestone in the country's automotive industry.
• Renault Group is a renowned automotive innovator with a history of introducing ground breaking products, including Europe's first mass-produced electric car.
• The partnership between Wallan Trading and Renault Group aims to enhance the automotive landscape in Saudi Arabia, offering expanded options and exceptional driving experiences to customers.
• The collaboration aligns with Saudi Arabia's Vision 2030, focusing on economic diversification and the growth of non-oil sectors, with the automotive industry playing a pivotal role.
• According to Ken Research, the strategic partnership strengthens Saudi Arabia's position as a vibrant automotive hub, driving the expansion and diversification of the sector while contributing to employment opportunities and broader economic goals.

Wallan Group, a longstanding leader in the Kingdom's automotive sector for over four decades, is proud to announce a ground breaking partnership with Renault Group. Effective from June 1st, 2023, Wallan Group assumes the prestigious role of the official distributor for Renault in the Kingdom of Saudi Arabia, signifying a significant milestone in the advancement of the country's automotive industry.

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In the 1980s, Wallan Group embarked on its business journey by establishing itself as the authorized agent for Hyundai in the central region of Saudi Arabia. Since then, the company has steadily expanded its automotive portfolio through strategic alliances with renowned global brands, encompassing both passenger and commercial vehicles. This ongoing growth has solidified Wallan Group's position as a key player in the Kingdom's automotive industry.

Renowned for its automotive innovation and technological prowess, Renault Group boasts a storied history of pioneering ground breaking products in the market. Notably, the company has been at the forefront of automotive electrification, introducing Europe's first mass-produced electric car. Established in more than 130 countries, the Group has sold 2.1 million vehicles in 2022. It employs nearly 106,000 people who embody its Purpose every day, so that mobility brings people closer.

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Aiming to elevate the Saudi market's automotive landscape, Wallan Trading and Renault Group have united to deliver an unparalleled level of automotive excellence. Leveraging Wallan Trading's robust distribution network and local market expertise alongside Renault Group's industry-leading vehicles and cutting-edge technologies, customers in Saudi Arabia can anticipate expanded choices and exceptional driving experiences.

By forging a strategic partnership, Wallan Trading and Renault Group strengthen Saudi Arabia's status as a vibrant automotive industry hub. As the Kingdom experiences rapid economic growth and increased consumer demand, this collaboration will drive the expansion and diversification of the automotive sector, generating employment opportunities and aligning with the Kingdom's overarching economic objectives.

In line with the Kingdom of Saudi Arabia's Vision 2030, Renault Group's collaboration with Wallan Trading reinforces the emphasis on economic diversification and the growth of non-oil sectors. With the automotive industry serving as a key driver in achieving these objectives, the partnership between Wallan Trading and Renault Group actively contributes to the establishment of a dynamic and competitive automotive market in Saudi Arabia.

In summary, the strategic partnership between Wallan Trading and Renault Group represents a major milestone in the Saudi automotive market. Wallan Trading aims to solidify its leadership position, while Renault Group strives to enhance its footprint in the Kingdom. Together, they are well-positioned to introduce innovative automotive solutions, establish new benchmarks of excellence, and fuel the growth of the automotive sector in Saudi Arabia.

From Accidents to Solutions: Navigating KSA's Thriving Aftersales Service Market: Ken Research

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KSA's automotive repair industry, encompassing crash repair, mechanical repair, auto care, quick lube, spare parts, motor insurance, and rental & leasing, is projected to reach SAR ~2.5billion valuation by 2025, offering inter-related opportunities for growth and understanding.

STORY OUTLINE

• Growing Industry Valuation: KSA's automotive repair industry, including crash repair, mechanical repair, auto care, quick lube, spare parts, motor insurance, and rental & leasing, projected to reach SAR ~2.5 billion by 2025.
• Diverse Product Sections: Over 100 exhibitors from 12 countries showcased aftercare products and solutions across six distinct sections, reflecting industry breadth.
• Importance of Crash Repair: Vital for vehicle safety and functionality, driven by accident rates, vehicle ownership, and insurance coverage. 2019 saw around 1,897 fatal road accidents in KSA.
• Technological Advancements: Investments in advanced tools and technologies like computerized diagnostics and automated repair processes are reshaping KSA's aftersales market, while aluminium repair expertise becomes crucial.
• Insurance Penetration and Growth: With approximately 35% insurance penetration and 5 million motor insurance policyholders, significant growth in revenue from insurance claims for crash repair is anticipated.

In the year 2020, more than 100 exhibitors hailing from 12 different countries gathered to present cutting-edge automotive aftercare products and solutions across six distinct product sections. 7 Verticals Shaking up KSA's Automotive Aftersales Service Industry: Crash Repair Industry, Automotive Mechanical Repair Industry, Auto Care Industry, Quick Lube Industry, Spare Part Market, Motor Insurance Industry, Vehicle Rental & Leasing Industry.

1. The Vast Landscape of Aftersales Services and Crash Repairs in KSA

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The crash repair market in KSA plays a crucial role in maintaining the safety and functionality of vehicles and is driven by factors such as the number of accidents, vehicle ownership, insurance coverage, and regulations pertaining to road safety. Road accidents are a significant contributor to the demand for crash repair services. In 2019, there were approximately 1,500+ fatal road accidents reported in Saudi Arabia, resulting in 2,106 fatalities.

On an average, 65-70% of the crash repair charges are for spare parts, 5-10% for consumables and 15-20% for labour charges.

2. Revolutionizing KSA's Aftersales Service Market with Technological Upgrades

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Investments are directed towards adopting advanced technologies and tools that improve the repair process and enhance the quality of repairs. This includes computerized diagnostics, precision measuring systems, advanced paint booths, and automated repair processes. The automotive industry is increasingly incorporating aluminium in vehicle panels to achieve lightweight designs. In 2017, The Saudi National Automobile Manufacturing Co. (SNAM) and the Saudi Arabian Mining Co. (Maaden) entered into a cooperation agreement to enhance the aluminium content in new vehicles.

As a result, body shops need to develop capabilities for aluminium repair, which differs from steel panel repair in several aspects. For instance, traditional hammering techniques are ineffective for removing dents from aluminium panels, requiring the use of heat-based methods instead.

3.Ensuring Your Ride: Exploring Insurance Penetration in the KSA Automotive Market

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Insurance coverage plays a vital role in the crash repair market. As of 2020, the insurance penetration rate for vehicles in Saudi Arabia was around ~35%. This means that a significant portion of vehicles on the roads is covered by insurance, which contributes to the demand for crash repair services.

In 2020, the number of motor insurance policyholders in KSA reached approximately 5 million. Looking ahead, the revenue generated through insurance claims for crash repair is projected to exhibit rapid growth over the next five years. It is compulsory for all fleet companies to insure their vehicles and for vehicles older than 3-4 years majority prefer to repair the vehicle at non-agency in case of accident.

In conclusion, KSA's aftersales service market, including crash repairs, technological advancements, and insurance penetration, is a critical component of the automotive industry. With the growing importance of safety, advanced repair technologies are revolutionizing the sector. Additionally, insurance coverage plays a vital role in driving the demand for crash repair services. As the market continues to evolve, stakeholders must adapt to meet the diverse needs of vehicle owners and ensure a safe and efficient aftersales service landscape in KSA.