Arthur D. Little (ADL) has released the fourth edition of its highly anticipated Future of Automotive Mobility (FOAM) report, offering a comprehensive analysis of current and future trends in the automotive industry. This year’s study includes insights from over 16,000 respondents across 25 countries, with a special focus on the Kingdom of Saudi Arabia (KSA). The report provides in-depth perspectives on car ownership, electric vehicles, autonomous driving, and new mobility services within the Saudi market.
“Saudi Arabia is at the vanguard of the mobility revolution,” said Alan Martinovich, Partner and Head of Automotive Practice in the Middle East and India at Arthur D. Little. “Our findings highlight a strong preference for local brands, a significant readiness to transition to electric vehicles, and a favorable attitude towards autonomous driving technologies. These insights are vital for automotive manufacturers, distributors, and policymakers navigating the evolving landscape of the Saudi automotive market.”
Key Findings for Saudi Arabia
1. Car Ownership and Driving Patterns: Saudi respondents demonstrate a strong preference for car ownership, with 89% predicting that owning a car will become even more important over the next decade. The study reveals that Saudis have longer commutes and higher annual mileage compared to their European counterparts, despite a greater prevalence of remote working. On average, Saudis commute 32 km daily, 50% more than Europeans, and are estimated to drive 18,000 km annually, 38% more than Europeans.
2. Shift to Electric Vehicles: 37% of the respondents who currently own internal combustion engines (ICE) intend to switch to electric drivetrains for their next car purchase ranging from Plug-in Hybrid Electric Vehicle (PHEV) to pure Battery Electric Vehicles (BEV). Notably, two thirds of Saudi respondents are willing to pay a premium for electric drivetrains. This transition is driven by factors such as lower total cost of ownership, environmental benefits, and concerns about climate change. However, challenges like limited range, high up-front purchase costs, and poor charging infrastructure remain significant barriers.
3. Emerging Mobility Trends: Ride-hailing (Uber, Careem) services are the most popular new mobility option among Saudis, with higher usage rates compared to traditional car sharing and ride sharing, higher than Europe (28%) and the USA (50%).
4. Autonomous Vehicles: Saudi consumers exhibit three times higher acceptance of autonomous vehicles compared to Europeans, with 70% expressing a favorable attitude towards the technology, compared to just 28% in Europe. Safety concerns, including risks associated with both human and machine errors, remain the primary obstacles to broader adoption.
5. Car Purchasing Behavior: The internet is the preferred channel for Saudis throughout the car buying process, from finding the right vehicle to arranging test drives and closing deals. Influencer reviews play a crucial role in decision-making, underscoring the importance of digital and social media in shaping consumer preferences. Despite their willingness to buy cars online, Saudis still visit dealerships more frequently than other nationalities, averaging 3.6 visits per purchase.
Saudi residents have traditionally been enthusiastic visitors of car dealerships and are as open as any nation in the world to a digital experience, including closing the deal online,” Rich Parkin, Partner in the Automotive Practice at Arthur D. Little and lead- author of the study commented that “car manufacturers (OEMs) and distributors will need to combine physical and digital experiences to serve the Saudi customer of tomorrow.”
The full report, “The Future of Automotive Mobility 2024,” provides a detailed analysis of global automotive trends and their implications for various regions, including the Middle East. This study is an indispensable resource for industry stakeholders seeking to understand and capitalize on the dynamic changes shaping the future of mobility.
