Chinese cars in Saudi Arabia

Chinese car sales in Saudi Arabia are approaching a 2 percent market share as demand for low-cost cars rises and the Saudi car market expands.
This is seen as the latest wave of foreign car imports to shake the status quo in the market after previous waves from Japanese companies in 1980s and the Koreans in the 1990s.
Yet, this Chinese wave is likely to remain limited while the dominance of Toyota in Saudi Arabia with a 40 percent market share continues.
Companies such as Geely and Maxus are doing well in Saudi Arabia especially after choosing Haji Husein Alireza & Co. for their distribution.
Great Wall is another company making inroads while JAC Motors are building up market share with dealer al-Jedaei.
While the Chinese have not yet shaken the established order in the market, they are growing fast and competing on price and simplicity.
The Saudi car market, which grows by about 7 percent annually, is dominated by Toyota, followed by Nissan (9.5 percent), European cars (18 percent) and American cars (6.5 percent).
Chinese cars are well-received by Saudi nationals and expatriates alike.
Those who bought Chinese cars are happy with the reliability and the service.
Sales are helped by Saudi ban on imports of second-hand cars over five years old.
Most Chinese cars serve as second family cars or town cars for shopping.
The Koreans were the last wave to invade the Saudi car market and now Korean Hyundai and Kia are the second highest exporters of cars to Saudi Arabia.
Koreans are known for good quality vehicles and value for money.
They are defending their market share against Chinese imports by negotiating to build low-cost cars in the Kingdom.
The Saudi car market is expected to reach the million-car mark in 2017.
It is the largest regional market in the GCC and a prize worth pursuing by automakers.
While Chinese companies have done well so far, the long term prospects are best for those who think strategically to build local assembly plants.
Without locally-produced cars and components giving local Saudi employment, companies which rely on imports alone, regardless of size, would remain on shaky grounds.
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Adel Murad is a senior motoring and business journalist, based in London.
Email: adel.murad@ntlworld.com