The first half of 2021 saw the automotive industry growth in Saudi Arabia drop by 33 percent to 52,140 units sold following the significant increase early this year. However, the apparent fall still puts the Kingdom's automotive industry at the pre-pandemic level, with sales increasing by 37.4 percent yearly.
The automotive industry's market share is led by Toyota, taking 27.1 percent of the total automotive sales in Saudi Arabia. Contrastingly, Chevrolet experienced the worst performance comparatively, with a drop of 16.3 percent.
Saudi Arabia's car market started in 2021 with a significant rise in sales of 27.4 percent. Still, it quickly collapsed due to the new wave of COVID-19 virus that forced the government to impose the second closure for public spaces such as shopping malls, restaurants, and public parks. Not until March, the Kingdom opened some restrictions and implemented curfews for non-essential businesses to run. The nationwide conditions have negatively affected Saudi Arabia's automotive market to experience a 1.7 percent drop, continuing to 74.2 percent in April. Albeit the market recovers in July, consumers remain hesitant to purchase cars due to the uncertainty that lingers due to the pandemic.
Being the largest automotive market in the Middle East, Saudi Arabia holds incremental opportunities for businesses and investors to chip in the growing industry branches ranging from motor insurance and vehicle leasings to automotive products' core sales. The country expects a locally-manufactured car to launch in 2022 as the government prepares the necessary infrastructures for global automakers to enter the industry, aiming for over USD 10 billion of direct investments in 2040 and provide 27,000 direct jobs for the sector. The growth of the automotive industry is a part of Saudi Arabia's strategic industrial plan to reach Vision 2030 to engage solid economic sectors and build intense business competition in the Kingdom.
Today, Saudi Arabia has encouraged automotive startups to enhance their operations and boost the industry's growth. Speero, for example, has raised over USD 1,8 million in pre-series A round from several well-known venture capitals to scale their measures digitalizing the fragmented future trends in automobile industry in Saudi Arabia. The startup allows its consumers to access affordable parts and ease the process of after-sales care activities by connecting consumers with reliant insurances.
In July, the Saudi Strategic Management Committee has launched the Delivery Plan 2018-2020 that focuses on mining, energy, and logistics, initiated through deals with leading automakers for car plant developments to localize car productions that foreign players previously dominated. The decision to localize car productions was since Saudi Arabia is the only nation in the Middle East and North Africa (MENA) region with high car demand and a non-existent local or regional production hub.
The realization of the automotive industry growth in Saudi Arabia is long-awaited, with the Kingdom holding more than 50 percent of the entire Gulf Cooperation Council (GCC) demand for cars or equivalent to 1,3 billion vehicles to date. Saudi Arabia's infrastructure development that supports domestic car productions will bring forth the Kingdom's unleashed potential in the automotive industry.