This article was published by Cartea.
Saudi Arabia, one of the Middle East’s most significant automotive markets, is currently experiencing a notable shift in its automotive sector. The February 2025 report by Cartea Research Institute—a platform focused on the Arabic-speaking auto community offering expert news, buying advice, and vehicle services—highlights key developments shaping this transition.
According to the report, Japanese and Korean brands continue to lead the Saudi market, jointly accounting for over 50% of total vehicle sales. Toyota and Hyundai remain dominant forces, despite emerging competition. In contrast, the top five Chinese brands together hold only 5.3% market share, indicating the substantial challenges they face in expanding their footprint.
Although new technologies are slowly entering the market, internal combustion engine (ICE) vehicles still represent the overwhelming majority of sales, at 93.3%. With strong demand for family-oriented models and rising interest in smart features, the key challenges for Chinese brands are twofold: how to compete with entrenched Japanese and Korean manufacturers, and how to satisfy Saudi buyers’ priorities—namely affordable sedans, seven-seat SUVs, and services tailored to local needs.
The report breaks down the market dynamics through three main perspectives: brand positioning, segment preferences, and digital consumer behavior.
1. Brand Structure Breakdown
Saudi Arabia’s auto market today is divided into three brand categories:
- Established Leaders: Japanese and Korean automakers enjoy consumer trust due to their reliable products, extensive dealership presence, and dependable after-sales services.
- Emerging Challengers: Newcomers—both regional and global—are capturing attention with aggressive marketing and product offerings fine-tuned to local preferences.
- Chinese Entrants: Chinese brands are gradually entering the mid-range market (SAR 50,000–120,000), but remain nearly absent in the premium space (above SAR 120,000). This underscores their struggle to build a strong reputation for quality and move beyond budget-focused branding.
2. Segment Preferences
Sedans lead the Saudi vehicle market, representing over 50% of total sales in February 2025. The dominant price bracket for sedans is SAR 50,000–120,000, pointing to consumer preference for affordability and fuel efficiency. SUVs account for more than 30% of all vehicle purchases, particularly those exceeding SAR 120,000. These higher-end SUVs are often chosen for their seven-seat capacity and off-road suitability—features especially valued by families and adventure-seeking drivers. Chinese vehicles, however, have struggled to gain significant traction in either category, suggesting a misalignment with Saudi buyer expectations.
3. Powertrain Trends
ICE vehicles still dominate the Saudi market due to cheap fuel prices and an established refueling infrastructure. While hybrid electric vehicles (HEVs) have a minor market presence, new energy vehicles (NEVs)—which include battery-electric and plug-in hybrid models—are only just beginning to make an impact. Factors such as limited charging stations, low public awareness, and the high cost advantage of traditional fuels have slowed down the adoption of NEVs.
4. Price Band Penetration
Chinese automakers have gained some visibility in the mid-range price segment (SAR 50,000–120,000) with compact sedans offering high specifications at competitive prices. Yet, they lack presence in the premium tier—where luxury sedans and upscale SUVs remain the territory of established Japanese and Korean brands. To compete in this space, Chinese manufacturers must enhance product quality, improve brand perception, invest in service and dealer networks, and offer robust after-sales care.
5. Online Search Behavior and Digital Impact
Digital engagement is a critical indicator of brand interest. In February 2025:
- Jetour led with 15,959 online searches, likely benefiting from a recent model release and marketing push.
- Changan saw the highest potential website traffic with around 86,000 projected visits, driven by locally tailored offerings and strategic promotions.
These trends highlight the importance of digital visibility and localized online marketing to capture consumer interest and influence buying decisions.
Strategic Recommendations
From a combined analysis of sales and search behavior, Cartea Research outlines three strategic paths for growth in the Saudi market—especially for Chinese brands:
- Adopt a Strategic Brand Position: Compete effectively in the mid-market by offering models that meet local needs. Enhance perceived product quality and service infrastructure to break into the premium category.
- Adapt to Powertrain Realities: ICE vehicles will continue to dominate in the short term. However, offering hybrids as a bridge and investing in NEV infrastructure and public education could pave the way for long-term success.
- Prioritize Segment Fit: Focus on budget-friendly sedans in the SAR 50,000–120,000 range and develop durable, family-sized SUVs priced above SAR 120,000 to meet local consumer demands.
These recommendations aim to guide new market entrants—especially Chinese automakers—in navigating the complexities of the Saudi automotive industry and achieving sustainable growth.
