I. Saudi passenger car market OVERVIEW   

Saudi Arabia is the main automobile consumption market in the Middle East. Due to the imperfect public transportation system, cars are the main means of transportation in and between cities. According to incomplete statistics, the current number of cars in Saudi Arabia is about 20 million, and the population in Saudi Arabia is about 34 million, ranking among the top in the world. In 2018, Saudi Arabia imported a total of $8.44 billion, down 5.5 percent year on year, accounting for 6.1 percent of total imports.

From the perspective of automobile consumption, the tariff on imported cars in Saudi Arabia is 5%, and 5% value-added tax has been levied since January 2018. The overall tax rate is not high. In addition, the bank's automobile consumption loan business is mature and the oil price is lower than the international level, so automobile consumption is acceptable for ordinary people.

In terms of car brands, Japan, the United States and South Korea have long been the top three importers of cars to Saudi Arabia. Among them, Japanese cars have been deeply involved in the Saudi market, covering a full range of models, with large ownership, high retention rate and good reputation among consumers. In recent years, Japanese cars have developed rapidly and become the largest source of imported cars in Saudi Arabia in 2018. American cars occupy a dominant position in the Saudi market with large-displacement models, but due to the change of consumer preferences, the market share is gradually shrinking. Korean cars are favored by consumers for their high cost performance. However, due to the quality recalls of major Korean car brands in 2017, which affected consumer trust, Korean cars are gradually losing market share to their competitors (mostly Asian countries). In addition, in recent years, Chinese automobile enterprises, mainly Geely, GAC Trumpchi and Changan, have in-depth studied the Saudi market, identified the market positioning, and manufactured car models that meet the needs of Saudi consumers, which have gradually gained favor from Saudi consumers. In 2018, China exported about 200 million U.S. dollars of cars to Saudi Arabia, a year-on-year increase of about three times.

From the perspective of vehicle emission, Saudi consumers are in a stage of gradual change in concept -- from the pursuit of large emission to the pursuit of practicality, from long-distance driving to daily walking. The reasons mainly include the government's vigorous advocacy of energy conservation and environmental protection, and the continuous improvement of energy efficiency indicators. Fuel prices continue to rise, increasing the cost of driving; Women driving gradually open, the concept of "light load" car commuting gradually accepted by the public.

II. Overview of the second-hand car market in Saudi Arabia

Currently, Saudi Arabia imports about 25,000-30,000 used cars a year, mainly German and American cars. The UAE and Saudi Arabia are both members of the GCC Customs Union and have zero tariffs for the circulation of goods between them. Most of Saudi Arabia's used car imports come from Dubai. In addition, after field visits to several local second-hand car markets, we can see from the feedback of different merchants that under the existing circulation conditions, the supply of Saudi second-hand car market is close to saturation.

Technically, the Saudi Organization for Standards, Measurement and Quality updated the Saudi used car import rules in 2016. The main contents include: the service life of imported passenger used cars shall not exceed 5 years, and the service life of trucks and other transport vehicles shall not exceed 10 years; The energy efficiency of used cars for passenger use should not be less than 10.3km/L, and that of trucks and other transport vehicles should not be less than 9.0km/L. No major traffic accidents or legal disputes have occurred; A used car cannot be used as a taxi or police car.