Market Trends of GCC Finished Vehicle Logistics Industry
Government Investments In Road Infrastructure is Driving the market
According to the Ministry of Transport and Logistics Services (MTLS), Saudi Arabia's road network stretches over 73,000 km. Of this, 49,000 km consists of single-lane roads, which the Kingdom plans to upgrade to two-lane roads, while motorways make up 5,000 km. Additionally, Saudi Arabia boasts 144,000 km of functional dirt roads.
The Kingdom is leveraging its road network not just to bolster logistics growth but also to enhance passenger transport. In February 2023, the government inked investment contracts to roll out a nationwide bus network. This network aims to link over 200 locations through 76 distinct routes. Designed to serve intercity needs, the bus services target an annual ridership of 6 million passengers. Furthermore, the initiative aligns with national sustainability goals by aiming to curtail car journeys. Economically, this venture is projected to inject approximately SAR 3.2 billion (USD 853 million) into the annual GDP.
In April 2023, the government revealed tendering for several motorway projects: Jeddah-Makkah (64 km), Yanbu-Jubail (447 km), Asir-Jazan (136 km), and Jeddah-Jazan (570 km). These projects are part of the National Center for Privatization (NCP) efforts, focusing on privatization and public-private partnerships (PPP). The MTLS is overseeing the tendering process. Once completed, these projects are set to bolster the Kingdom's high-capacity, high-speed road transport capabilities significantly. Overall, these initiatives underscore Saudi Arabia's commitment to enhancing its transportation infrastructure and logistics, driving economic growth, and achieving sustainability goals.
Saudi Arabia is dominating the region
Saudi Arabia's automotive industry, with imports surpassing one million vehicles annually, ranks among the world's top 20 vehicle import markets and stands as the largest in the Arab World. The consistent growth of Saudi Arabia's automotive sector is primarily attributed to the government's dedication to enhancing the automotive value chain and increasing local content, all part of a broader initiative to rejuvenate the manufacturing landscape.
As the nation pushes forward with its ambitions, it targets an annual production of 300,000 cars by 2030, alongside 3–4 original equipment manufacturers (OEMs) aiming to produce over 400,000 passenger vehicles. Notably, Saudi Arabia currently dominates the GCC, accounting for more than half of its car sales. By 2030, the county aims to produce 300,000 cars annually and has 3–4 original equipment manufacturers (OEMs) producing over 400,000 passenger vehicles. Ceer, the Saudi EV brand, is poised to inject USD 8 billion into the nation's GDP by 2034. The Saudi automotive aftermarket, valued at USD 4.2 billion, constitutes 40% of the entire GCC aftermarket industry. Initiatives like the National Automotive and Vehicles Academy (NAVA) and the Automotive Manufacturers Association (AMA) are specifically designed to nurture local capabilities, particularly in the emerging EV sector, accelerating overall sector development.
As the Saudi automotive industry continues its rapid ascent, the appetite for aftermarket products and services—ranging from spare parts and accessories to maintenance—will inevitably surge. Currently, the cumulative value of the Saudi automotive aftermarket stands at an impressive USD 4.2 billion, making up roughly 40% of the entire GCC aftermarket landscape. With these strategic advancements, the Finished Vehicle Market in Saudi Arabia is poised for significant growth, solidifying its position as a key player in the global automotive industry.
