New-car sales in Saudi Arabia are projected to cross one million units in 2018 in view of rapid trade and economic expansion in the Kingdom, according to a study. The study forecast continued rapid growth of the Middle East car market, particularly in the luxury car sector where sales are expected to rise by 15 percent in 2012 compared to 9 percent in 2011.
Major projects underway in various regions and several other special factors underpin stable and continued growth in Saudi Arabia, distinguishing it from the neighboring countries, the study said.
The demand for smaller, lower-priced family cars will rise
Moreover, BMI forecast in another report, that the demand for smaller, lower-priced family cars with more economical running costs will rise as wealth increases at the lower end of the economic spectrum.
The Saudi car market has traditionally been dominated by high-end models. The population of Saudi Arabia is expected to grow 39 percent to a total of 36.5 million people by 2030 and as a result BMI expects to see a longer-term rise in demand for smaller cars.
The ultra-luxury car market in Saudi Arabia grew 39% in 2010
The ultra-luxury car market in Saudi Arabia grew 39 percent in 2010 and a 90 percent increase in Q111 sales for Rolls-Royce, in comparison with the same period in 2010, leads BMI to believe that the high-end auto sector will continue to show impressive growth this year. Rolls-Royce, Lexus and Porsche have all recently invested heavily in opening new state-of-the-art sales and servicing centers in anticipation of an increase in demand.
Moreover, BMI anticipated above-average growth in the market for commercial vehicles, are currently responsible for about 20 percent of auto demand in Saudi Arabia.