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.
In comparison, male drivers are set to increase from 9m in 2017 to 9.5m in 2020.
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, according to a report published today by PwC Middle East titled ‘Women driving the transformation of KSA automotive market’.
In September 2017, Saudi Arabia announced in a royal decree that it would allow women to drive by June 2018.
PwC’s study finds that the decision presents significant opportunities for the government, strategic investors, motor insurance companies, car leasing companies, pension funds and private investors to create innovative solutions to serve the increase in demand.
The opportunities for the automotive market in Saudi Arabia can be summarised in four key areas: the Kingdom’s Vision 2030 and the creation of new job opportunities for Saudi nationals; incremental capital investment to build new road infrastructure; increase in insurance revenue with recalculation of insurance premiums; and establishment of new women-only driving schools.
Simultaneously, the motor insurance market will benefit from the new women drivers as it creates opportunities for new motor insurance providers, products and services.
As a result, the motor insurance is expected to grow by 9% annually during 2017-2020 to reach $8bn (SAR30bn).
Hala Kudwah, PwC Saudi Arabia financial services and consulting leader, said: “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 the country’s female workforce. There would be dependencies such as necessary infrastructure and services to support female drivers; for example, women driving instructors, driving schools, license issuance, etc.”