KSA Crash Repair & Automotive Aftersales Service Industry Outlook to 2025

Market Overview:

The automotive aftersales service market encompasses the sale of automotive parts, accessories, and services to consumers once they have purchased a vehicle from the manufacturer. It includes a wide variety of products and services aimed at improving, fixing, or personalizing vehicles. The KSA Automotive Aftersales service specifically refers to the market for automotive parts, accessories, and services within the Kingdom of Saudi Arabia. This market offers a diverse range of items and services to customers for the purposes of vehicle maintenance, repair, and modification.

KSA's automotive repair industry, encompassing crash repair, mechanical repair, auto care, quick lube, spare parts, motor insurance, and rental & leasing, is projected to Grow effectively by 2025, offering inter-related opportunities for growth and understanding.

KSA Aftersales Service Market Analysis

Approximately 10-15% of accidents go unreported, while the remaining 70-75% of accidents are reported solely to Najm for the purpose of claiming insurance.
+70% of vehicle owners prefer to repair their vehicle in a non-agency workshop to pay less deductible amount, to customize repair according to themselves and to get quicker delivery.

In case of major damage, the probability of selling or discarding the vehicle is higher in comparison to minor damage. Vehicles are usually sold at 30-40% of the original cost majorly to the insurance company.

In both categories, Al Rajhi and Tawuniya emerge as the top choices among insurance companies. The majority of insurance policies sold by brokers and agents are comprehensive insurance.

Amidst the digitization of operations and the implementation of continuous reminders and marketing techniques by industry players, the scheduled repair segment is experiencing robust growth.

Key Trends by Market Segment:

By Type of Vehicle: In 2020, passenger cars (sedans and hatchbacks) comprised more than half of total vehicle sales. while SUVs and pickups accounted for less than half. Non-agency workshops predominantly handle the repair of LCVs and HCVs, whereas agency repair services are mainly sought after for small vehicles like passenger cars (sedans and hatchbacks). Moreover, owners of LCVs and HCVs display a greater inclination towards utilizing refurbished spare parts compared to owners of passenger cars.

By Service: In Saudi Arabia, the car service market is primarily led by the Crash Repair service segment, encompassing agency workshops, multi-brand workshops, mechanical repair, and accidental repair, among others.

Competitive Landscape:

The competition structure in KSA’s Automotive Aftermarket Service Industry is fragmented in nature. The OEM car service companies were observed to compete on the basis of the number of dealerships, service centers, service lead time, number of cars serviced, sourcing of spare parts, Services Offered, USP, Recent Development, Booking Mode. The multi-brand car service companies were observed to compete on the basis of Brands serviced, number of stores, Service lead time, Number of cars serviced, USP, Services offered.

Agency workshops possess a competitive advantage due to their brand certification, allowing them to charge slightly higher prices. Branded workshops leverage their agency status and establish partnerships with insurance companies, offering discounts. Independent workshops dominate the market share by providing crash repair services at more affordable rates.

Recent Developments:

In the automotive aftersales service market of Saudi Arabia, there have been several recent developments and government initiatives aimed at promoting growth and enhancing the overall customer experience.

The government has implemented measures to improve the quality of service, increase transparency, and protect consumer rights. Additionally, there has been a focus on the adoption of advanced technologies such as digitization, automation, and artificial intelligence to streamline operations and improve efficiency.

These initiatives aim to create a more competitive and customer-centric environment in the KSA automotive aftersales service market.

In 2020, the used car market in Saudi Arabia experienced the entry of new players, while online marketplaces expanded their presence, indicating a growing trend in the industry.

In September 2020, Sell Any Car, a UAE-based company, introduced Kayishha, an online auto marketplace for used car sales, in Saudi Arabia. The platform's objective is to integrate its technology-driven platform with automotive dealers and auto inspection centers across the nation.

Future Outlook:

KSA Crash Repair Industry is Expected to grow rapidly 2025. Increasing Competition, increase in demand of Skilled Labor, Changing Repair Technology will increase the cost of Crash Repair in KSA.

Insurance companies are focusing on key priorities and embracing upcoming trends in the industry. The digitization of insurance policy sales, claim evaluation, and claim application processes is set to eliminate inefficiencies within the system, streamlining operations and enhancing customer experience.

Auto hub’s growth highlights its ability to cater to the increasing demand from Rental & Leasing service providers by offering a wide range of services. With a significant market share, Auto hub provides services such as repair, maintenance, cleaning, and other preventive measures for the overall fleet of vehicles each year.

Amidst the impact of COVID-19 on the tourism industry, leasing companies are expected to witness rapid growth in their fleet sizes. This can be attributed to rental players transitioning their rental fleets to the leasing segment.

The automotive aftermarket is shifting towards a proactive service-based approach to uncover hidden opportunities within the ecosystem and enhance overall performance.