New standards on vehicles in Saudi Arabia from next month

New vehicle sales in Saudi Arabia might be affected by the current increased awareness on energy efficiency

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New vehicle sales in Saudi Arabia might be affected by the current increased awareness on energy efficiency and new standards based on an initial consumer campaign which will be applied from next month, according to Carmudi’s report on the Booming Automotive Industry in Emerging Markets (BMI).

By 2019, the total vehicle fleet on the Kingdom’s streets will reach over 7.9 million units, further pushing for the need to address fuel consumption, the report said.

In Saudi Arabia, the largest importer of cars and automotive parts in the Middle East, 65.5% car buyers report using the Internet to conduct research on a car before making a purchase.

Car dealers in Saudi Arabia are flocking to the Internet to reach potential consumers. The study found that over 57% of car dealers surveyed report using the Internet to advertise to customers. Over 28% of car dealer survey participants also actively advertise their car listings on the Carmudi platform and use social media to reach customers.

The shift from offline to online is so apparent in Saudi Arabia that car dealers that participated in the survey stated that they are not currently using old media such as newspaper classifieds and auto expos to advertise their listings, said the report.

Car sales in Saudi Arabia reached 750,000 in 2013, a 6% increase from 2012, spurred by the rising levels of disposable income.

Saudi Arabia’s vehicle market is by far Middle East’s largest market and is dominated by Japanese brands. The Kingdom has a market worth of more than $22 billion.

Global automotive sales for 2015 are expected to reach close to 89M units, a 2.4% growth from 2014. Emerging markets’ share of global sales will rise from 50% in 2012 to 60% by 2020, while their share of global profits is also set to rise by 10%. When it comes to new cars, purchase intent is strongest in Asia, where 65% of respondents say they will buy new cars in the next two years, compared with 7% who plan to buy used cars.

Globally, auto e-commerce has grown at such a staggering rate that now as many as 80% of new car customers and almost 100% of used car customers begin their car shopping experience online. With Internet and mobile penetration significantly growing in emerging markets, the rate of moving the car shopping experience online is beginning to mirror that of Western Markets.

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