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Economy or equality: the driving force behind Saudi women taking the wheel

Driving automotive car steering


Economy or equality: the driving force behind Saudi women taking the wheel

The Kingdom of Saudi Arabia made history when it passed a Royal Decree in 2017 permitting women to drive in the Kingdom. The ban officially lifted on June 24, 2018 when women took to the streets albeit behind the wheel.

This lifting of the ban means that Saudi Arabia will have 3 million female drivers by 2020. While this obviously affects the automotive industry, there are other sectors – and the Saudi economy at large – that will grow.

In the short-term, the following industries will see an immediate growth:

Motor insurance

READ: How brands celebrated the ban lift on Saudi women driving 

In 2017, there were 27 companies providing motor insurance in KSA. With women entering the market, naturally, there will be more opportunities. This market is expected to grow by nine percent annually between 2017-2020 to reach SAR 30 billion.

[Tweet “Motor insurance market in KSA to grow 9% annually between 2017-2020 thanks to #SaudiWomenDriving.”]

Car leasing

Although the current market is quite fragmented, PwC estimates car leasing to pick up substantially with an annual growth rate of four percent over 2017-2025, compared to two percent per annum historically.

Car sales

Car sales are expected to grow by nine percent per annum until 2025, compared to an annual growth of three percent in the past four years.

Brands like Nissan, Ford and Chevrolet, among others are already investing heavily in the Saudi market.

READ: Is this World Cup sponsorship doing more harm than good?

Driving schools

Driving schools, naturally, are among the first to benefit from the decision. PwC research shows that in 2017 there were 1.1 driving schools per million residents in Riyadh versus 1.8 driving schools per million residents in Dubai, which indicates an opportunity to increase by over 50 percent. Presuming that new schools will be women-only, it also means an increase in job opportunities for female driving instructors.

Private driving licenses

Subsequently, the volume of new driving licenses issued is expected to increase significantly by 2020 as women began to apply for driving licenses from Q2 2018.

There are a few industries that will also see an indirect impact in the short-term, such as retail, leisure spend and private drivers.

ALSO READ: Watch the World Cup in an… Uber?!

In the longer-term, there will also be an impact on roads, maintenance, parking, with 55 percent believing that traffic congestion will get worse.

As of 2017, women largely relied on family members to drive them around (47%). Now, as they move around more freely, their spending and consumption patterns will also change, signaling positive signs for the Kingdom’s retail and F&B sector.

According to Bloomberg, this decision could add as much as $90 billion to the economic output by 2030.




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