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E-commerce companies and 3PL players across the board eventually committing to including EVs in their fleet as a part of their sustainability initiatives will have Strong Influence in the Industry: Ken Research
Small format EVs may gain momentum in the near future, given their lower fuel and maintenance costs. They are also less dependent on charging infrastructure, since their power requirements are lower, and they are more likely to come in models that allow battery swapping.
Electric Vehicles in Food and Grocery Delivery sectors are expected to penetrate faster due to availability of hybrid models. Major demand regions such as Central and Western Saudi Arabia ( Riyadh , Jeddah and Dammam and AL-Khobar being major cities) to witness LEV penetration in the near future
In order for platforms to stay asset-light, service contracts with strategic partners (for EV deployment and charging infrastructure) present a high potential for deployment.
such as a limited hybrid car range, high prices, insufficient battery life and an underdeveloped charging ecosystem are yet to be filled. Fleet operators need to create and manage vehicle service infrastructure and charging infrastructure on their own due to limited availability of existing set-ups in public domain.
The report titled by Ken Research suggested that the Light Electric Vehicle market is further expected to grow in the near future owing to available tax benefits and convenient usage. The advent of e-commerce, food and grocery deliveries leading to a rapid increase in demand for last-mile deliveries along with the initiatives taken by the government regarding the EV Infrastructure and Policies will increase its sale in the near future. The market is expected to register a positive ten year CAGR of 4.0% in terms of last mile delivery fleets during the forecast period 2020-2030F.
KSA Automotive is currently dominated by local retail & distributing partners, facilitating growth of international OEMs & other brands amidst a shortfall of domestic manufacturers with good quality products. The demand for automotive vehicles & spare parts is majorly fulfilled via imports from countries like USA , Japan , China , Korea, India & other gulf countries. The ecosystem is made up of big trading organizations who harness their retail & distribution networks across KSA to compete in the market for Tier 1 & 2 cities, while majority of rural areas & tier 3 cities still rely on unorganized market for local demand. KSA communicates a lot with surrounding gulf countries in terms of imports & re-exports & is looking forward to develop domestic manufacturing & exporting capabilities for South Africa & other African & gulf nations with stronger tax & driving policies, development of industrial hubs, efficient bilateral relationships & allies, technological competence & its enhancement.
The used car industry in Saudi Arabia has grown at a CAGR of 0.8% on the basis of gross transaction value over the period 2014-2019 and declined at a CAGR of -2.4% on the basis of sales volume. The departure of expats from the country and the economic instability contributed to the decline in sales during 2016-2017. The addition of women drivers and the high levels of disposable income in the country are one of the major growth drivers of the industry. Boom in the number of online auto-classified platforms and the traction of the consumers towards online platforms is contributing to the inclining used car sales in the country.
Thailand Used Car sector is in the maturity phase, growing at a CAGR of 1.8% during 2014-2020. Increasing demand for private vehicles, reduction in purchasing power, easy availability of finance, and increasing VAT on new cars are the main reasons behind positive growth in used car sales revenue. Another major driver is the drop in use of public transport due to the pandemic and need for private vehicle. The online used car market has been emerging with the rise in the popularity of e-commerce platforms in the country. The growth of online advertising, which has fuelled the rise of online classified platforms such as iCar Asia , CarSome, Carro and others have revolutionized the way in which pre-owned vehicles have been sold in the country.
Indonesia's automotive aftermarket service industry revenue stood at USD ~ billion in 2021 and recorded a CAGR of 5.4% during 2015-2021. The multi-brand workshops dominate the Indonesian automotive aftermarket service industry due to their cheaper service fee and generalized service offerings. ~% of the after-sales care service market is captured by the multi-brand service centers owing to its low service & spare parts cost and high preference by post warranty car owners. OEM car service centers in Indonesia witness the majority of the pre-warranty cars visiting their centers. High-quality service, genuine spare parts and more reliability on the OEM service centers are other reasons why a customer prefers the OEM service centers in Indonesia .
Malaysia automotive aftermarket service industry revenue stood at USD ~ Bn in 2020 and recorded a CAGR of 2.9% during 2015-2020. Multi-brand car service centers are majorly preferred by the users with out-of-warranty cars. Lower cost of multi-brand service centers & Availability of quality spares from reputed suppliers is leading to the growth of multi-brand car service centers in Malaysia . OEM car service centers in Malaysia witness the majority of the pre-warranty cars visiting their centers. High-quality service, genuine spare parts, and more reliability of the OEM service centers are other reasons why a customer prefers the OEM service centers in Malaysia .
Ken Research
Ankur Gupta , Head Marketing & Communications
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