Saudi automotive industry is seeing a shift

The Covid impact on the automotive industry of Saudi Arabia has seen decline in the footfall across various showrooms of brands, which used to be the major mode of sales, pre-Covid.

“We see a shift towards e-commerce in the KSA automotive industry with higher online penetration levels across various segments, but not a major move from physical to online sales,” said Ken Research in a report.

Various new vehicle maintenance models are also witnessed with varying ownership periods amidst job loss and closing of many offices. Share mobility market also witnessed a decline as people move towards hygienic ways impacting different market segments. Corrective measures taken by government itself to sustain business and are providing incentive to move towards innovative business models in various industry segments.

The technology trends and developments also witness a major shift towards radical ERP and CRM systems being utilised in the market, majorly by organised segment. Entities operating in the automotive industry of Saudi Arbabia are able to understand the usage and optimisation capabilities of streamlined and efficient operating systems and continue to use different softwares and solutions in addition with customised modules to enhance their operations and customer relationship management efforts.

The integration is majorly done via international and local technology partners who compete on integration, cost effeciency duration of the project and more factors, and provide either single software utilisation or in some cases, a mix of various vertical and standalone ERP solutions.

The report titled ‘KSA Automotive Industry Outlook to 2025 – Focus on Technology Adoption and Trends for Dealers, Distributors, Spare Parts Suppliers, Fleet and Leasing Companies and Car service providers’ observed that the there is a vast opportunity to disrupt the traditional and conservatively operating automotive industry.

KSA automotive is currently dominated by local retail and distributing partners, facilitating growth of international OEMs and other brands amidst a shortfall of domestic manufacturers with good quality products.

The demand for automotive vehicles and spare parts is majorly fulfilled via imports from countries like the US, Japan, China, Korea, India and other Gulf countries. The ecosystem is made up of big trading organisations who harness their retail and distribution networks across KSA.