Due to its continued economic buoyancy, the country as a whole or even its citizens have not faced the problem of cash flow, which has kept its automobile sector booming.

Every household has on an average one-passenger vehicle. This is true across urban, provincial and rural Saudi Arabia. Sedans are the most popular passenger cars (75 percent) followed by four-wheel drive vehicles (20 percent) with ownership of these vehicles higher in rural areas (27 percent). The average age of vehicles ranges from 5 to 6.5 years with 42 percent vehicles manufactured in the new millennium year or later, according to official statistics.

More than 340,000 cars, trucks and vans are annually imported into Saudi Arabia, including used cars and buses. The economic recovery, which started a few years ago, will likely boost the demand to around 360,000 units, valued at $6.3 billion. The strength of the Saudi economy, reflected in a higher per capita income, has led to the increasing popularity of luxury cars and premium automobiles. In addition, Saudis have always opted for large SUVs that can accommodate large families.

Larger households own American brands, while relatively smaller local households buy European brands. People belonging to the lower strata of society, that is educationally and economically backward, go for Korean brands. However, a relatively new trend reflects on the fact that Korean car sales are increasing by the day. Whether Kia, Hyundai, SangYong, Samsung or Daewoo, people are lapping them up, particularly because they are available with easy payment facilities and also come with safety features, and that their luxury versions are equipped with advanced technologies. In other words, Korean brands have been growing over time, according to Kia Motors Saudi Arabia (Al-Jabr Automotive), which is the authorized distributor for Kia Motors Corporation in the Kingdom since January 2006. It has since established several showrooms and facilities and appointed dealers throughout the Kingdom.

Kia Saudi Arabia underwent its third distributors change in as many years in April 2006. Customers were wary of their existing warranties and the continuation of after sales support. Coupled with a daunting target of increasing annual sales by 250 percent to 20,000 units, the outlook for a successful year appeared shaky. “But change often presents opportunities,” says Rudy Girgis, chief operating officer of Kia Motors Saudi Arabia. “This was keenly recognized by the new ownership, both before and after the takeover. The takeover presented an opportunity to not only restructure our organization but also our whole approach to doing business.”

Market share was expanded by not only positioning its products against the top contenders and emphasizing key Kia attributes as value, safety, style and warranty, but also by affirming its commitment to its customers through enhanced maintenance options and operating in state-of-the-art facilities to reflect the quality of Kia vehicles.

The launch of Mohave (Barrego) also positioned Kia Motors Saudi Arabia as a progressive operation and distributor of quality vehicles, while turning it into one of the most talked about new vehicles in the market.

“In order to ensure that our strategy was effectively implemented by our staff, we had to initiate an attractive incentive program,” says Girgis. “Not only did we establish our own credit division, but we also created a rental division, giving customers more options,” he said, adding that some other plans were also initiated to exceed 35,000 unit sales in 2009. The company expects to end 2010 with more sales than last year.

“There are two principles I always return to in this business. The first is that nothing happens in car dealerships until a new car is sold, and the second is that you can always replace a car but never a customer. So, at the end of the day, selling a car to every customer that we have the privilege to serve has been our winning strategy,” says Girgis.

Upbeat about Hyundai’s sales performance are Hyundai Motor Company’s Riyadh-based distributor Wallan Group and Jeddah-based distributor Mohamed Yousuf Naghi Motors. “Last year, we accomplished great things despite the difficult economic environment both at home and abroad, bringing Hyundai Motor Company one step closer to becoming a leading global company,” says Wallan Group, which is headed by Capt. Saad F. Wallan as chairman.

Hyundai has succeeded in establishing itself as a true, top-class leader with favorable reviews from major automotive agencies and the media. Last year, Genesis received the Car of the Year award in North America, while Hyundai Motor’s brand value has been climbing up the global ranking ladder going by the accolades it has received from various surveys and magazines, says a senior management executive at Mohamed Yousuf Naghi Motors. Hyundai has revealed that they are developing a larger new 5.0-liter V8 to use in the Genesis and the Equus full-size sedans, and it looks like the new motor will potentially be the best in the market. According to Autoblog, Hyundai’s new direct-injection 5.0- liter V8 will make 429 hp and 509 Nm of torque, outstanding figures compared to Infiniti’s 420 hp 5.6-liter V8 and 412 hp Ford’s 5.0-liter V8, let alone Mercedes-Benz’s ancient 382 hp 5.5-liter V8 or BMW’s turbocharged 400 hp 4.8-liter V8. The new 5.0-liter V8 is a sizeable increase of 59 hp and 11 Nm of torque over the 4.6-liter V8 that powers the current Genesis, while also improving fuel economy thanks to an all-new 8-speed automatic transmission. Not many details are available at this point, but it is possible that the new engine may show in 2012 models of the Genesis and the Equus.

Samsung Motors, the South Korean joint venture with Renault and Nissan, has released the first official photos of the third-generation Samsung SM5 sedan, set to go on sale by late January in its home country. Incidentally, the outgoing SM5 forms the basis for the GCC-spec Renault Safrane, especially its 2011 model. The SM5 is based on the current-generation Renault Laguna and features Nissan’s 2.0-liter petrol engine with a 6-speed automatic transmission. There is no mention of a V6 option yet. Available features include adaptive HID headlights and massage front seats. The car looks good, both inside and outside.

Chevrolet, General Motors Company’s leading global vehicle brand, has some new plans up its sleeves. Its 2011 model is being launched in Korea, says GM Daewoo Auto & Technology President and CEO Mike Arcamone. “The introduction of Chevrolet will enable us to provide our customers an array of exciting new vehicles from the brand’s global lineup, giving them more driving options,” said Arcamone. “This will help GM Daewoo increase our sales and market share in the domestic market while generating additional revenue, strengthening our employees’ job security, creating new jobs and resulting in additional investment in Korea. We regard it as a key to our long-term success.” As an example of the products that Korean consumers can expect, GM Daewoo introduced the new Chevrolet Camaro at its motor show stand. The popular sports car will go on sale in Korea in 2011. “According to our market research, half of all Koreans are familiar with the brand and more than 80 percent are aware of Chevrolet’s distinctive logo,” said Arcamone. “This is indicative of the positive brand image that already exists among consumers in Korea toward Chevrolet. We see tremendous upside with its introduction.” Arcamone also emphasized that today’s announcement is about brand coexistence, not brand replacement. “Our decision to launch Chevrolet is in the best interest of GM Daewoo and Korea,” he said.

Founded in 1911 and named after famous racecar driver Louis Chevrolet, Chevrolet is one of GM’s four core brands. Last year, Chevrolet accounted for 44 percent of GM’s global sales and registered a 21 percent increase in sales from the previous year. GM is bringing the new brand to Korea and expected to be subsequently introduced across Saudi Arabia and the rest of the Middle East. GM International Operations President Tim Lee, said: “Last year, 3.3 million Chevrolet vehicles were sold in 130 markets worldwide, making it the fourth most popular passenger car brand globally.” The success of products such as the new Chevrolet Cruze global compact sedan and the next-generation Chevrolet Spark mini-car has played a key role in Chevrolet becoming one of the fastest-growing vehicle brands in the world. Chevrolet sales in 2009 were twice those in 2005. “Chevrolet has enjoyed success in mature markets in Saudi Arabia and the Middle East, as well as in North America and Europe and the emerging markets in Asia Pacific and Latin America,” said Lee. “We are confident that it will drive us into a new era in Korea.”