Big cars sell well in Saudi Arabia, but small ones sell even better
Jeddah, Saudi Arabia — Here, where gasoline is roughly three times cheaper than the Water most Saudis drink, huge Lincoln Continentals and Cadillacs are selling well. Saudi Arabia represents one of the few remaining lucrative markets for American-built luxury cars.
Nonetheless, though gasoline at Saudi pumps costs roughly only 25 cents a gallon, most cars on Saudi highways are in the small- car category and highly fuel-efficient.
Car salesmen here ar conducting business as usual and in some cases anticipate record sales in a healthy Saudi automobile market.
Industry officials are optimistic that car and truck sales will continue to increase in the years ahead as highway and road projects are completed and as maintenance facilities and car dealers expand throughout the kingdom.
General Motors, which represents 20 perent of the ovearll automobile market and 40 percent of the luxury market here, anticipates increased sales in most models with particular strength in the luxury classes.
Chrysler, which represent approximately 10 percent of the luxury market, is estimating up to a 50 percent increase in sales this year and similar growth for the next few years as overall development in the kingdom continues.
The Ford Motor Company is banned from doing business in the kingdom because of the Arab boycott of firms involved with Israel.
While the state of the automobile market here is in sharp contrast to the difficult year American automobile manufacturers and dealers are experiencing, the Saudi and American markets share at least one common trait: the success of Japanese imports.
Approximately 70 percent of the 300,000 cars and trucks sold here last year were imported from Japan, with Toyota, Datsun- Nissan, and Mazda capturing the major portion of the market.
Industry officials said that Japan's advantage in Saudi Arabia is due in part to their being the first to establish themselves here. But officials also explained that the Japanese are offering an affordable level of quality which is cheaper than the competition and acceptable to most Saudis and expatriates.
The largest-selling vehicle in the kingdom has historically been the economy-sized one- ton pickup truck, which is often fitted with decorated welded bars over the rear bed to support canvas hoods. Truck cargoes range from lumber to sheep and goats to veiled Muslim women, and at times all three. (Under Saudi law, women are forbidden to drive.)
When originally introduced to the market, the trucks quickly became popular among the desert Bedouin, it is said. They found that the light trucks travel easily over sand when the tires are slightly deflated.
The trucks' rugged construction is also considered as asset in Saudi Arabia where it is not uncommon to encounter an open manhole on a major roadway and unmarked construction ditches.
Last year, Datsun and Toyota, the two leaders in small truck sales, sold 85, 000 one- ton pickup trucks. Sales are expected to remain strong this year.
Meanwhile, some officials are predicting a gradual shift in demand from one-ton pickups to sedans as the road network in the kingdom improves and as urban centers expand.
At present the largest selling car model here is the Mazda 929. Industry officials said that much of Mazda's success was due to its marketing strategy of reintroducing the 929 in updated model versions several times during the year. Dealers noted that a significant number of Saudi drivers don't wish to be seen in anything other than the latest car model.
The average life of a car in Saudi Arabia, considering heat, dust, road conditions, and the driving habits of motorists here, is estimated at between two and five years.
Though there is a used-car market, industry observers said most Saudis don't consider a car's potential resale value as a major criterion when buying a new car.
Car maintenance and repairs are expensive due to a shortage of mechanics. highways throughout the kingdom are dotted with rusting abandoned cars.
Overall, the auto and truck market in the kingdom has grown sales of just over 16,000 in 1970 to the present sales level of more than 300,000. The market growth, which coincides with the overall development "boom" years of the past six years in Saudi Arabia, is expected to continue at a gradual, steady pace into the 1980s.
Estimates are that only four of every 100 kingdom residents own a car, and officials predict that the market won't peak until roughly 35 percent of the population are car owners.