Thu 08-03-2018 14:23 PM
RIYADH, 8th March, 2018 (WAM) -- In September 2017, Saudi Arabia announced in a Royal Decree that it would allow women to drive by June 2018. A decision that presents a great number of opportunities not only for the Government, strategic investors, motor insurance companies, car leasing companies, pension funds and private investors but to the sector as whole in creating innovative solutions to serve the demand.
The report published today by PwC Middle East on the occasion of International Women’s Day titled, "Women driving the transformation of KSA automotive market", looks into key opportunities for the automotive market in Saudi Arabia, that can be summarised in four key areas.
The first of which is a priority in the Kingdom’s Vision 2030 and that is creating new job opportunities for Saudi nationals, second, incremental capital investment to build new road infrastructure,third an increase in insurance revenue as insurance premiums will be recalculated, and finally establishing new women - only driving schools.
Hala Kudwah, PwC Saudi Arabia Financial Services & Consulting Leader, said, "Saudi women have been behind numerous achievements and now visibly behind the wheel," adding, "When considering the scale of the market, our analysis tells us that there’s an opportunity to increase the number of driving institutions in the Kingdom by over 50% , an increase that will be translated into job opportunities for our females."
The total number of female drivers in Saudi Arabia is projected to reach three million in 2020, which will have a profound impact on a number of areas ranging from car sales to motor insurance, car leasing and driving schools.
Kudwah added, "There would be dependencies such as necessary infrastructure and services to support female drivers; for example, women driving instructors, driving schools, licenses issuance , etc. However we are mindful of the significance of early successes to fully reap the fruits of this milestone in the women empowerment journey."
Specifically, car sales and car leasing are expected to pick up substantially, with an expected annual growth rate of 9% and 4% until 2025 respectively, given the substantial new women customer segment.
On the other hand, the highly competitive motor insurance market will benefit from the new women drivers as it creates opportunities for new motor insurance providers, products and services, in addition to reshaping the motor insurance landscape. The motor insurance is expected to grow by 9% annually between 2017 - 2020 to reach SAR30bn.