COVID-19 significantly impacted global economies and sectors, and the automobile industry is currently being shaped by it.
The major companies in the automotive sector were required to abide by rules and limitations established by the State of Kuwait. Banks temporarily prohibited auto-financing for non-Kuwaitis and outlawed test drives.
The estimated market value of Kuwait's automotive sector is 3.1 million, of which 1.5 million are predicted to come from the used car market and 1.6 million from the new car market. In addition, as of 2021, the industry is expected to have 1.8 million users.
Poixel’s market report seeks to provide a thorough analysis of the Kuwaiti automotive market by identifying the major players, their business models, and the market overview, from our survey data, in-field interviews, and data analysis.
In our sample, 46.7% of people purchase one car every five to six years. This is apparent among Kuwaiti nationals who have high spending power. Moreover, nearly half of the sample drive an SUV, and most have vehicles made between 2010 and 2020, making SUVs the most popular type of vehicle.
The typical price that consumers will spend for a car is 10,187.5 KWD. The majority of consumers buy an automobile for personal use instead of family or business purposes. As a result,
Consumers are more educated than ever before
According to seven car agencies surveyed by Poixel, customers are more aware of autos. They are knowledgeable about the features and specs of the cars, which accelerates the sales process.
“Consumers are educated and are open-minded. They have access to online research tools and knowledge about the brand’s vehicles. For us, this expedites the sales process for us by 70-80%” Mohammad Ali, Sales Consultant at Chevrolet
Ten out of twelve firms agree that consumers now are more knowledgeable about autos than they were five years ago. Many materials are available online through websites, blogs, and social media platforms, making it simple to study various autos. The vehicle information must be readily available on the dealerships' websites to facilitate the consumer purchase decision. To understand more about car dealerships in Kuwait, visit here (goes to our next article)
Car brands in Kuwait
According to a poll by Poixel, Toyota is the most popular automobile brand in Kuwait as of 2021, followed by Chevrolet (16.9%), Nissan (10.0%), Ford (8.45%), and GMC (6.5%). When compared to comparable manufacturers like Chevrolet (9,718.4 KWD), Nissan (11,157.75 KWD), and Ford, Toyota automobiles have an average price of (9400.5 KWD), which is comparatively affordable.
The Landcruiser is the most popular automobile in the GCC and Toyota is its most well-known brand. The UAE is the country where Land Cruiser is the most popular, followed by Kuwait, Bahrain, Oman, Tanzania, Lebanon, and Angola. Toyota now holds a 19.6% market share in Kuwait, with the next-largest markets being Chevrolet (16.9%), Nissan (10.0%), Ford (8.45%), and GMC (6.5%).
Preference for Chinese Car Brands
63.7% of respondents would not buy a Chinese-manufactured vehicle, hence their market share is extremely low compared to competing brands. Kuwait has a few Chinese brands such as SAIC Motors, GAC Motors, DFM, MG Motors, BAIC, Geely, and Chery.
63.7% of respondents would not buy a Chinese-manufactured vehicle; hence their market share is meager than competing brands. Chinese car brands hold about 8% of the market share, up from two years ago.
Most of the sample surveyed have sufficient income power, and prioritize performance, exterior appearance, and safety features over the vehicle's price and warranty (which Chinese car brands are known for). The key strengths of Chinese brands are their ten-year warranty and reliable after-sales service. Their main consumer base is Kuwaiti nationals who buy cars for their drivers or children.
We expect Chinese brands are growing their market share in the region. The majority of consumers purchase new vehicles instead of used ones since they are already priced at an average of 5,000 KWD, which is comparatively extremely low to the market price.