Last month’s Royal Decree in Saudi Arabia that allowed women to drive by June 2018, will provide significant economic benefits not only to car manufacturers, insurers and allied Services but would also give a boost to retail, entertainment, food and beverages sectors, according to the findings by the research agency Kantar TNS.
The study conducted amongst Saudi residents in partnership with online panel providers Kantar MobiworkX and Borderless Access, says with more women on the move, their career prospects will dramatically improve and the disposable income of households will rise.
“It is expected to change the very fabric of Saudi society and impact the economy in the long run,” the study notes, adding, “OEMs that quickly adapt their lineup to deliver to this audience will capitalize the most on this change. Dealers over time may need to revamp their sales and after sales process to cater to the needs of female buyers and relook at their communication strategies keeping this audience in mind.”
While going to work was the key reason to drive (45 per cent) dropping children (39 per cent) was the other expressed reason. Interestingly, about 17 per cent of the intending drivers expected to shop more and indulge in more leisure activities.
Combining this with the increase in female disposable income, a flip to the retail, entertainment and F&B sector is anticipated in the near future, the study notes.
An overwhelming majority of intending drivers (92 per cent) are expected to reduce their reliance on taxis and services such as Uber as a result, it adds.
Women have also come out strongly in favor of reducing their reliance on personal drivers with over three fourths (80 per cent) of intending drivers expected to reduce their dependency. As a result, we are expecting a significant impact on the usage of public transport (taxi/Uber) and a declining demand for drivers, finds the Kantar TNS research.
“This decree will result in a significant demand surge for new vehicles with some 60 per cent of the residents intending to buy a car in the next 3 years and 38 per cent planning this purchase in the next year. Non-premium, small and medium car segments – with an average budget of SAR 63,000 – will be more in demand, with 71 per cent intending to buy in that range,” the study forecasts.
However, it adds the market for premium vehicles will grow as well and slightly more than a tenth are expected to pay over SAR 110,000 for these cars.
“There is a high degree of consistency in our findings between males and females, indicating the staunch support of males to the initiative. With males, likely to continue to play a key role in the decision of vehicle make/model, 44 per cent were still undecided on whether to purchase or give an existing vehicle to the woman. Among those who were decided, 57 percent plan to buy a new car for women and a fourth likely to buy a new vehicle for themselves.”