Amidst the price hikes in the new cars, the used car prices are falling thereby raising the demand for used and used car finance
Introduction of VAT in 2018 is expected to adversely impact the demand for cars leading to a fall in the demand for car finance
Increased focus of banks on consumer finance is expected to increase car finance penetration rate
Saudi Arabia car finance market is expected to recover during the forecast period 2017-2021, from the fall experienced towards the end of the review period in terms of credit disbursed for car finance. The falling prices of used cars are expected to augment the demand for used car in the market. Following the rise in the demand for used cars, the demand for used car finance is also expected to rise. Moreover, the banks are expected to increase their focus on consumer finance products at a significant rate in the coming years. This step from the banks is anticipated to raise the car finance penetration rate in the country. Moreover, the increasing urbanization in the country is expected to augment the demand for cars and car finance in Kingdom. The urbanization rate in the country has increased from 83.1% in 2015 to 83.4% in 2016 and is anticipated to rise further in the coming years. The government is supporting growth in the non-oil private sector as to reduce the dependence of oil sector amidst the oil price slump. This is expected to raise the employment opportunities in the country raising the disposable income of the households. Rising disposable income is anticipated to raise the demand for cars and car financing.
Increasing population with a notable increase in the number of expatriates shall augment the demand for car financing options. The increased awareness for the use of electric cars in the Kingdom is expected to raise the replacement demand for cars in the coming years. The banks and private finance companies can regard this as an opportunity to introduce financing options specific to the purchase of electric cars and attain an improved rate of growth in the market.
Ken Research in its latest study, Saudi Arabia Car Finance Market Outlook to 2021, observed that the digitalization of car finance in the Kingdom and establishment of tie-ups between financial institutions and dealers and car rental companies would augment the market growth. The new car sales are expected to fall due to the consistent increase in its prices. Amid competition in the market, several players are in plans to introduce new and innovative product and service offerings in the car finance segment as to induce demand among the public.
The Saudi Arabia car finance market is estimated to register a positive CAGR during 2017-2021. Increased focus of banks on consumer finance, rising expatriate population, increased rate of used car financing and other related factors are expected to be key drivers for a growth in the demand for car finance in the country.
The report provides information on the number of new cars financed, new and used car finance penetration, tenure of new and used car loan and the regions dominating the market in terms of credit disbursed and number of cars financed. It also covers the major players in the market such as Al Rajhi Bank, National Commercial Bank, Alinma Bank, Riyad Bank, Arab National Bank, Al Amthal Financing Company, Al Yusr Financing Company, Morabaha Marina Financing Company and Saudi Finance Company.
Key Topics Covered in the Report:
Auto Finance Opportunities in Saudi Arabia
Growth Trend Car Loan Saudi Arabia
New Car Sales in Saudi Arabia
Used Car Sales in the Saudi Arabia
Saudi Arabia Auto Loan Disbursal
Riyadh Average Loan Rate
Saudi Arabia Auto Loan Market
Auto Loans Market in Saudi Arabia
Financing a Used Car in Saudi Arabia
Competition Saudi Arabia Car Loan
Market Share Car Finance Saudi Arabia
Financing Schemes Car Loans Saudi Arabia
Auto Loans Terms and Conditions in Saudi Arabia
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Ankur Gupta, Head Marketing & Communications