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The report titled “Saudi Arabia Car Finance Market Outlook to 2021 – Rising Used Car Demand and Increasing Focus of Banks on Consumer Finance to Stabilize Growth” which provides an extensive analysis of car finance market in Saudi Arabia. The report covers market size on the basis of credit disbursed, number of cars financed and new and used car penetration, segmentation on the basis of new and used car finance, tenure of loan for new car and used car and number of new cars financed in each region. The report also includes the rules and regulations implied by the government on the banks in lending a car loan, competitive landscape and company profiles for major players in the car finance market. The report provides detailed overview on the general features of car loan in the country and future outlook & projections with future strategies of the players in the market.

The report facilitate the readers with the identification and in-depth analysis of the existing and future trends and issues that impacts the industry and has anticipated growth in the future depending upon changing industry dynamics in coming years. The report is useful for prospective borrowers, car dealers, banks, private financing companies and other stakeholders to plan their market centric strategies in accordance with the ongoing and expected trends in the future.

Industry Overview
The market has displayed a steady growth trend until 2015 during the review period, 2011-2016 at a CAGR of ~%. In 2016, there had been a fall in the credit disbursed for passenger and commercial cars as a result of the falling demand for new cars in the country. The growth exhibited by the market during the initial five years of the review period was supported by factors such as increasing demand for new and used cars, growing car rental industry, increased demand for commercial cars and other related factors. Fall in the credit disbursement observed during 2016 was resulted out of the increased new car prices, reduced supply of used cars, rising fuel prices and certain macro economic factors.

Saudi Arabia Car Finance Market Segmentation
Saudi Arabia car finance market is segmented by new and used car finance, by tenure of loan for new and used car, by finance source and by region.
On the basis of credit disbursed the new car dominates the market with a share of ~% in 2016 followed by used cars. For new cars, the tenure of five years dominates the car finance market with a share of ~% on the basis of credit disbursed in 2016. It is followed by three years, two years and other tenures.
For used cars, the tenure of one year accounted for the highest share in the market during 2016 on the basis of credit disbursed which was ~%. It is followed by two year and three year tenures.

Banks dominate over the private financing companies in the market with a share of ~% in terms of credit disbursed.
Riyadh holds the highest share among all other regions of Saudi Arabia in terms of number of new cars financed. It held a share of ~% during 2016. Jeddah holds the second position in the market followed by Dammam, Makkah and others.

Competitive Landscape
In Saudi Arabia, car finance is offered to the public by banks and private finance companies and the market is dominated by banks. The banks held a share of ~% in the market in terms of credit disbursed for car finance followed by private finance company with a share of ~% during 2016. There are nearly 26 banks with more than 2,000 branches and more than 10 recognized private finance companies spread across the Kingdom. All these players are competing against each other on the basis of profit rates, loan tenure, minimum salary requirement, down payment and other such parameters. The major players in the market are Al Rajhi Bank, National Commercial Bank, Riyad Bank, Al Amthal Finance Company and others. There is a stiff competition in the market and it is a moderately fragmented market.

Saudi Arabia Car Finance Market Future Potential
The car finance market in Saudi Arabia is expected to recover from the fall experienced towards the end of the review period and grow at a CAGR of ~% during the forecast period 2016-2021. The growth is expected to emerge on the grounds of new schemes and loan programs being introduced by the banks with minimal terms and conditions. However, the growth rate expected to display during this period is moderate, which is anticipated to fluctuate depending on the Kingdom’s economic and political circumstances. Owing to the lowering prices for used cars the demand for used cars is expected to rise, thereby raising the demand for used car finance. The Saudi Arabian Monetary Authority’s reform of lowering interest rates to enhance liquidity is expected to positively impact the growth in the market.

Ken Research
Ankur Gupta, Head Marketing & Communications

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