MENA Used Car Market to Register Growth with a CAGR of 6.00% until 2026
Growing preference for luxury cars as well as need for personal transportation coupled with the growth of middle income group population is expected to boost the growth of used car sales in MENA countries.
According to TechSci Research report, “MENA Used Car Market By Vehicle Type (Small Cars, Mid Cars and Luxury Cars), By End Use (Institutional Vs Individual), By Fuel Type (Petrol/Gasoline, Diesel and Others), By Country (Iran, Saudi Arabia, United Arab Emirates, Egypt, Morocco, Kuwait, Oman, Qatar, Tunisia, Bahrain, Lebanon, Jordan, and Rest of MENA), Competition Forecast & Opportunities, 2016-2026F”, MENA Used Car Market is anticipated to grow at a robust rate of 6.00% during the forecast period, owing to rising demand for used mid cars from non-native executive employees. In MENA countries, executive employees are mostly posted from outside the countries, and are not permanent residents. Hence, they prefer a non-expensive used car for personal transportation. Saudi Arabia and Iran are the two most contributing countries to the MENA used car market. Recently, the removal of ban from women drivers in Saudi Arabia has resulted in an increase of women drivers. Moreover, opting for self-driving gives many women a sense of empowerment. Many women are learning to drive and are hitting Saudi roads with four-wheelers and several women with foreign licenses have already obtained Saudi driving licenses. All the above factors are expected to increase the sales of used four-wheelers in Saudi Arabia, which in turn is further going to boost the used car market in MENA. It has been observed that Saudis use their car for a range of activities including daily commuting to schools, offices and shopping. Long-distance travelling and desert safaris are preferred weekend getaways for them. Toyota, Nissan, Mazda are among the most preferred brands in Saudi Arabia, and models like Toyota Camry, Toyota Land Cruiser, Toyota Vitz, Nissan Sunny, Mazda Atenza, etc. are popular among used car customers of Saudi Arabia.
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MENA Used Car Market is segmented by Vehicle Type, Fuel Type, End Use, By Country and By Company. In terms of fuel type, market is divided into Petrol/Gasoline, Diesel and others. The majority of used car sales come from Iran, Saudi Arabia and United Arab Emirates. These countries are highly oil driven economies, with Saudi Arabian oil and gas sector roughly accounting for 42% of the country’s GDP in 2019. As a result, the price of petrol/gasoline is comparatively cheaper than other countries in the world. Owing to cheaper petrol/gasoline price and lower vehicle maintenance costs, the MENA used car market was highly dominated by the Petrol/Gasoline segment in 2020, registering a market share of more than 85% in terms of used car units sold across the region. Used Passenger cars running on eco-friendly sources of energy like Electricity, Hydrogen, etc. lie in ‘Others’ segment. These vehicles have lower lifetime running costs due to lower refueling costs as compared to the conventional non-renewable sources powered four-wheelers. Apart from having lower lifetime running costs, used passenger cars run on clean sources of energy, being favorable to environment thus they are a profitable choice for fleet owners over conventional used cars. Owing to the growing environmental concerns and increasing global temperatures, the used cars running on other fuels are anticipated to be the fastest growing segment, registering a CAGR of 8% in terms of units sold in the forecast years across the region.
COVID-19 has largely affected the economies of the Middle Eastern and North African countries. Walk-ins in the car showrooms decreased and imports were halted for a certain period of time. With negative impacts on employment, consumers started contracting their spending in a lot of countries. This resulted used car market to witness a decline in the sales for the year 2020 in MENA countries. Moreover, according to the Organisation Internationale des Constructeurs d’Automobiles (OICA) the sales of new car sales decline massively by 15% in 2020 as compared to 2019 figures. In United Arab Emirates this new car sales contracted by more than 44%. Such massive impact on new car sales signified consumer preference depreciation on investment on cars and moreover, imports of used car also decline massively due to import halt. Hence, these factors are impacting used car market which also witnessed a decline.
The used car market is scattered in MENA region when comes to market competition. Abdul Latif Jameel IPR Company Limited is an authorized Toyota dealer in Saudi Arabia. Since consumers mostly prefer Toyota for new as well as used cars in most of the countries in MENA. Therefore, Abdul Latif Jameel IPR Company Limited with its widespread network of used car showrooms is the leader in MENA Used Car Market. It is followed by companies like Kayishha (SellAnyCar), YallaMotor, Al Futtaim Automotive Group LLC, CarSwitch, DubiCars, Copart Inc., etc.
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“Abdul Latif Jameel IPR Company Limited dominated the market in the year 2020, due to its remarkable dealership network, which offers a wide range of economical yet qualitative products with attractive scheme benefits to its customers as well as withstanding government’s safety and emission norms. The demand for used cars is anticipated to increase globally in the coming years, on account of growing new car sales and this trend will likely contribute to the market growth”, said Mr. Karan Chechi, Research Director with TechSci Research, a research based global management consulting firm.
“MENA Used Car Market By Vehicle Type (Small Cars, Mid Cars and Luxury Cars), By End Use (Institutional Vs Individual), By Fuel Type (Petrol/Gasoline, Diesel and Others) and By Country (Iran, Saudi Arabia, United Arab Emirates, Egypt, Morocco, Kuwait, Oman, Qatar, Tunisia, Bahrain, Lebanon, Jordan, and Rest of MENA), Competition Forecast & Opportunities, 2016-2026F”, has evaluated the future growth potential of MENA Used Car Market and provides statistics & information on market size, structure and future market growth. The report intends to provide cutting-edge market intelligence and help decision makers take sound investment decisions. Besides, the report also identifies and analyzes the emerging trends along with essential drivers, challenges, and opportunities in MENA Used Car Market.
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