Published by Cartea.
Saudi Arabia, one of the most prominent automotive markets in the Middle East, is currently undergoing a significant transformation. According to the February 2025 Automotive Market Report by the Cartea Research Institute—a leading platform that delivers automotive news, accurate car-buying advice, and end-to-end vehicle services to Arabic-speaking audiences—manufacturers from Japan and South Korea collectively account for more than 50% of vehicle sales in the Kingdom. Toyota and Hyundai continue to dominate the top positions in the sales rankings. However, newer market participants are gradually influencing the competitive environment. In contrast, the top five Chinese automotive brands hold a combined share of only 5.3%, pointing to the significant obstacles they face in achieving broader market penetration.
While gasoline-powered vehicles still make up 93.3% of total sales, interest in family-oriented vehicles and smart automotive technologies is steadily increasing. This trend raises two fundamental questions: How can Chinese carmakers challenge the entrenched leadership of Japanese and Korean brands? And how can they fulfill the essential needs of Saudi consumers for reasonably priced sedans, large SUVs with three rows of seating, and regionally relevant services?
This article examines the market through three primary perspectives—brand positioning, segment distribution, and digital consumer search trends—to offer actionable insights that may assist Chinese manufacturers in securing a competitive position.
1. Brand Landscape
The current Saudi automotive market can be characterized by a three-tier structure of competing brands:
- Established Front-Runners: Japanese and Korean brands continue to lead due to their expansive dealership presence, established reputation for durability, and reliable after-sales service—elements that have contributed to deep-rooted customer confidence.
- Rising Challengers: A new wave of both regional and international brands is quickly acquiring market share, supported by region-specific marketing campaigns and vehicle offerings tailored to Saudi buyers’ tastes.
- Chinese Newcomers: While Chinese manufacturers have begun to enter the mid-range market—especially in the SAR 50,000–120,000 range—they are still largely unrepresented in the premium segment above SAR 120,000, suggesting a steep climb ahead for those looking to compete at the top.2. Distribution by Vehicle Type
- As of February 2025, sedans represented more than half of all new vehicle registrations in the Kingdom. Most of these were sold within the SAR 50,000–120,000 range, reflecting the market’s preference for cost-effectiveness and fuel efficiency. SUVs comprised over 30% of vehicle sales, with the strongest demand found in the SAR 120,000+ segment. The popularity of SUVs is largely attributed to families seeking seven-seater models and reliable off-road capability.
- Nevertheless, Chinese brands have yet to gain substantial traction in either the sedan or SUV categories, signaling a mismatch between their current offerings and the preferences of Saudi consumers.3. Engine Type Preferences
- Internal combustion engine (ICE) vehicles overwhelmingly dominate the Saudi auto market, constituting 93.3% of all vehicle sales. In contrast, hybrid electric vehicles (HEVs) occupy only a minor portion of the market. Meanwhile, new-energy vehicles (NEVs)—including battery-electric and plug-in hybrids—have only recently begun to enter the Saudi landscape.
- The slow adoption of NEVs is influenced by several factors: underdeveloped charging infrastructure, limited public awareness, and the continued economic advantage of cheap fuel. These challenges have collectively restricted the growth of the electric vehicle sector.
- 4. Market Penetration by Price Range
- Chinese automakers have made some progress in the mid-level price bracket (SAR 50,000–120,000) by offering compact sedans that appeal to budget-conscious buyers with strong feature sets at attractive prices. However, they are still nearly invisible in the higher-end market (above SAR 120,000), a space currently dominated by established Japanese and Korean luxury sedans and premium SUVs.
- For Chinese brands to compete in this high-value segment, they must focus on upgrading product quality, enhancing service coverage, and building brand equity to increase consumer trust and desirability.
- 5. Consumer Search Behavior
- Online activity in Saudi Arabia provides further insight into brand visibility and interest:
- Jetour emerged as the leading Chinese brand in terms of online search volume, generating 15,959 searches, primarily fueled by a recent product introduction and robust marketing campaigns targeted at the local market.
- Changan led all Chinese brands in projected website visits, with approximately 86,000 users engaging with their platform—showcasing the success of their locally focused product strategy and promotional outreach.
- These digital trends emphasize the importance of strategic online presence and customized digital marketing in increasing brand recognition and consumer engagement.
- Strategic Recommendations
- Drawing from both sales data and digital behavior, the Cartea Research Institute outlines three core strategies for automakers—especially Chinese entrants—aiming to expand their footprint in Saudi Arabia:
- Adapt to the Three-Tier Market Structure
- Embrace market agility and tailor products for regional demand to compete with fast-rising rivals.
- Elevate product quality and post-purchase services to gain entry into the premium category.
- Respond to Powertrain Realities
- Focus on ICE vehicles in the short term, while introducing HEVs as a transitional offering.
- Support NEV growth by investing in charging infrastructure and educational initiatives.
- Meet Key Consumer Demands
- Cater to price-sensitive sedan buyers in the SAR 50,000–120,000 range.
- Expand offerings of robust, seven-seat SUVs priced above SAR 120,000 to attract families and adventure seekers.
- Read the full article.
