Shifting sands of time: The changing nature of Saudi Arabia’s automotive industry
By Richard Brown2019-08-21T15:18:00
Changes to social and economic conditions, including the recent removal of a ban on female drivers, could give a welcome boost to the automotive industry in Saudi Arabia.
Saudi Arabia boasts access to over 400m consumers in the Middle East and North Africa (MENA), a vast region where annual car sales are currently only around 2.3m. Another benefit for companies looking to do business in the area is the Greater Arab Free Trade Agreement (known as Gafta) which permits duty-free access to 17 countries in MENA if local value added is 40% or above. Yet the Saudi government has ambitions to serve an even bigger area, taking advantage of its location between Europe, Africa and Asia and its access to 2 billion consumers within a three-hour flight time.
The government has embarked on an array of industrial, social and entertainment projects under its ‘Vision 2030’ initiative to diversify the economy away from its decades-long reliance on the petrochemical industry. Social policy will certainly have an impact on the automotive industry, including the removal of the longstanding ban on female drivers in June 2018, which has now liberated half the population to drive.