Saudi Arabia Passenger Car Market Projected to Reach USD 51.25 Billion by 2035

According To OMR Business Consulting The Saudi Arabia Passenger Car Market, valued at USD 21.4 billion in 2024, is projected to experience significant growth, reaching approximately USD 51.3 billion by 2035. The market is expected to expand at a compound annual growth rate (CAGR) of 13.4% from 2025 to 2035. This growth is driven by increasing demand for luxury vehicles, the rising popularity of eco-friendly cars, urbanization, and the government's ongoing efforts to diversify its economy through Vision 2030.

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Market Growth Driven by Demand for Luxury Cars

A major growth driver for the Saudi Arabia Passenger Car market is the rising demand for luxury vehicles. Saudi Arabia's affluent population, particularly in cities like Riyadh, Jeddah, and Dhahran, has a strong preference for high-end vehicle brands such as Mercedes-Benz, BMW, Lexus, Porsche, and Audi. The culture of luxury consumption in the kingdom, bolstered by high oil revenues and a thriving economy, has created a large demographic of consumers willing to invest in luxury vehicles as symbols of success and status. The growing emphasis on personal comfort, advanced technology, and status symbols is fueling the demand for premium cars.

Increasing Demand for SUVs

In terms of vehicle type, SUVs continue to dominate the Saudi passenger car market. Saudi consumers show a strong preference for larger vehicles, especially SUVs, due to their spacious interiors, versatility, and the capability to handle Saudi Arabia's diverse geography. The kingdom's rugged terrain and desert landscapes make SUVs an ideal choice for consumers looking for vehicles capable of handling off-road conditions. Automakers are responding by offering a wide variety of compact, mid-sized, and luxury SUVs, catering to different consumer needs, which further boosts the popularity of these vehicles in the market.

Shift Toward Eco-friendly Vehicles

With increasing environmental awareness and government incentives, there is a growing shift towards electric vehicles (EVs) and hybrid models. The Saudi government is encouraging the adoption of eco-friendly technologies through incentives like tax breaks, subsidies, and exemptions from registration fees. In alignment with Saudi Arabia's Vision 2030, which aims to reduce the kingdom's carbon footprint and diversify its energy sources, electric vehicles (EVs) are becoming a more attractive option for consumers. This shift is expected to contribute to the growth of the EV segment in the Saudi market over the forecast period.

The Saudi Arabia Passenger Car market is highly competitive, with key players such as Toyota Motor Corporation, Hyundai Motor Company, Nissan Motor Co., Ltd, Kia Corporation, ISUZU MOTORS LIMITED, and Ford Motor Company holding significant market share. These companies are focusing on innovation, expanding their offerings, and forming strategic partnerships to strengthen their presence in the market. Additionally, the increasing trend toward electric vehicles and sustainable technologies has prompted automakers to invest heavily in EV infrastructure and eco-friendly vehicle production. Strategic developments such as collaborations with local dealers, the introduction of new EV models, and participation in the growth of ride-hailing services will further shape the competitive landscape in the Saudi Arabia passenger car market.

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