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Saudi Arabia tops Gulf with lowest car prices, driven by multiple factors

Experts said that the presence of multiple dealers and distributors in Saudi Arabia is one of the main drivers of lower prices, offering a variety of offers and options to consumers. Shutterstock.
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Updated 18 January 2026
BASIM Bawazeer Al-EQTISADIAH
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Saudi Arabia tops Gulf with lowest car prices, driven by multiple factors

Updated 18 January 2026
BASIM Bawazeer Al-EQTISADIAH

RIYADH: The Saudi market is witnessing a decline in new car prices, reinforcing its position as the most competitive market in the Gulf region, not only in terms of demand volume but also in terms of pricing strategies and product availability, according to experts and specialists in the automotive sector who spoke to Al Eqtisadiah.

Multiple dealers and demand for Chinese cars reduce prices

Experts said that the presence of multiple dealers and distributors in Saudi Arabia is one of the main drivers of lower prices, offering a variety of offers and options to consumers, in addition to the significant role played by the entry of many Chinese brands, which enjoy high demand among young buyers.

They explained that the price advantage in the Saudi market appears in that car prices at dealers in the Kingdom are the lowest compared to dealers in Gulf countries.

This is mainly attributed to the large market size and high sales rates, which give dealers greater ability to compete and offer preferential prices.

Field survey records a 10–15% decrease

At the beginning of this year, a field survey by Al Eqtisadiah of car showrooms in the capital observed an actual decline in prices, driven by anticipation of new model arrivals, market saturation, and the wide variety of options available, especially with the large expansion of Chinese brands.

This decrease affected models with wide popularity, and major brands such as Toyota, Hyundai, and Honda, as well as Chinese companies, with rates ranging between 10 and 15 percent, reflecting a shift in market movement in favor of consumers and the availability of more competitive price options compared to previous years.

Saudi Arabia the cheapest in the Gulf for new cars

A recent research study, which covered 68 different models from 17 brands, conducted by Focal Point, a market research company, on new car prices in the GCC, revealed that Saudi Arabia stands out as the most affordable market for new cars with the lowest prices across all vehicle categories.

According to the price index in the report — with the Gulf average set at 100 — the UAE appears as the most expensive market for widely spread new cars at an index of 105.41, followed by Qatar at 104.42, and Kuwait at 103.25. Oman came next at 99.02, and Bahrain at 96.84.

In contrast, the cost index in Saudi Arabia was 91.05, the lowest among Gulf countries.

The study results showed a noticeable decrease in prices of popular models in the Kingdom, such as the Toyota RAV4, MG5, and Changan UNI-V.

For the sedan category, markets experienced slight fluctuations, but the data confirmed the same trend for the second consecutive year, with the UAE remaining the most expensive market in this segment, while the Kingdom continued to be the cheapest.

For SUVs and 4x4 vehicles, Qatar recorded the highest average prices in 2025, surpassing the UAE. This increase is attributed to higher prices of popular models such as the Toyota Fortuner and Kia Sportage in the Qatari market.

Kuwait highest for small transport, Qatar for SUVs

The study found that Saudi Arabia offers the most affordable market for small pickup trucks in the Gulf, while prices in Bahrain and the UAE remain close to the regional average.

It also highlighted that competition in the Kingdom is driven by the large number of brands, along with the rise of emerging names such as Haval, Great Wall, and Jetour, which have expanded their presence and dealership networks in major cities to challenge established players.

The Kuwaiti market recorded the highest average prices in the small pickup category in 2025, while Qatar recorded the highest average prices in the 4x4 segment.

The study’s data were collected in November 2025 from official dealer and company websites, with standardized criteria and exclusion of VAT to ensure accurate comparison across markets.

Prices decline following the global semiconductor crisis

Abdulrahman Al-Khaledi, automotive expert and CEO of Emadalden showroom, told Al Eqtisadiah that the car market in Saudi Arabia is highly diverse, catering to all price segments.

He noted that prices in Saudi Arabia are closely aligned with counterparts in the Gulf region, with price differences making the local market cheaper in some segments, even accounting for VAT.

“With the 15 percent VAT excluded, 60 percent of car prices in the Kingdom are the lowest in the Gulf, especially for major brands,” he said, noting that these competitive prices are mainly available at authorized dealers, not showrooms that may offer non-dealer cars at lower prices.

“When comparing the same car at dealers in Saudi Arabia versus dealers in Gulf countries, Saudi Arabia is unquestionably the cheapest without including VAT,” Al-Khaledi added, attributing lower dealer prices in the Kingdom to the large market size and high sales capacity.

He emphasized that multiple dealers for the same brand are a main driver of price reduction due to intense competition, as each dealer seeks to increase sales to prove its productivity to parent companies and demonstrate the ability to achieve high sales numbers.

Regarding recent developments, he confirmed a price drop in the past three months, with variation between companies.

He also traced market fluctuations, noting that the initial surge started in 2018, with a major spike during the COVID-19 pandemic and the subsequent global chip shortage, which reduced global production. He added that factories have returned to full capacity, reigniting competition.

Chinese cars reduce demand for second-hand vehicles

Al-Khaledi concluded that used car prices have not directly affected new car sales, as consumers are now leaning toward modern models, driven by the entry of Chinese cars offering competitive prices, making them an attractive alternative to used vehicles.

He cited that the used market has recently seen price declines, especially in luxury cars, with values falling up to 20 percent.

827k vehicles sold in Saudi Arabia in 1 year

According to Al Eqtisadiah’s financial analysis unit, based on Focus2Move data, car sales in Saudi Arabia reached 827,000 vehicles in 2024, up 13 percent year-on-year.

The top 10 automakers — led by Toyota, Hyundai, and Kia, alongside Nissan, Ford, Suzuki, Changan, Geely, Mazda, and MG — accounted for 80 percent of the market, selling a total of 659,000 vehicles.

Toyota dominated with a 28 percent share, followed by Hyundai at 16 percent, while the remaining brands each captured 7 percent or less.

According to the Cartea platform for automotive services in the Middle East and North Africa, total car sales in Saudi Arabia for the first half of last year reached 411,000 vehicles, including 48,000 Chinese cars with a 12 percent market share.

Samara Al-Ghamdi, an automotive specialist, told Al Eqtisadiah that the Saudi auto market has seen qualitative transformations in recent years, enhancing its position as one of the most competitive markets in the region.

In terms of prices, regional comparisons show that many global brands price their vehicles lower in Saudi Arabia than in neighboring markets, despite similar technical specifications and options, which she attributed to several factors, including market size, competition among dealers, supply chain efficiency, and flexible pricing policies adopted by companies.

Al-Ghamdi confirmed that the competitive advantage is not limited to purchase price but extends to vehicle availability and variety of options, with the Saudi market offering diverse categories and fast delivery compared to some regional markets that may face long waiting periods or limited models.

Diverse demand and competition support price declines

Speaking to Al Eqtisadiah, automotive specialist Ahmed Al-Harbi said that the Saudi market ranks among the most competitive in the region, supported by high purchasing power and large, diverse sales, stressing the need to differentiate between new and used car prices.

Regionally, he said, new car prices in the Kingdom are among the lowest, although VAT may affect the final consumer price.

He noted that price comparisons usually focus on dealer prices, while some showrooms may raise costs above actual value due to strong local demand, pointing out that market size and diversity represent a fundamental difference for the Kingdom, with demand growing across all categories from sedans to family SUVs.

He added that major projects and the presence of global companies in Saudi Arabia have created a different pattern of demand compared to neighboring markets.

Regarding price trends, he said that prices of many models began to decline due to the availability of supply after the chip shortage and supply chain disruptions during the pandemic, as factories returned to full production.

He also attributed the decline to fierce competition from many Chinese brands entering the market, in addition to interest rate increases at certain periods, which reduced financing and, consequently, tempered demand and prices.

Direct relationship between new and used car pricing

Al-Harbi pointed to the correlation between the new and used car markets, noting that a shortage of new vehicles drives up prices in the used segment.

He added that the used car market in Saudi Arabia could be among the most expensive in the region and advised consumers — especially those “not in urgent need” — against paying more than a car’s fair value, noting that “those in a hurry always pay more.”

 

Topics: cars vehicles SUVs Gulf countries

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Saudi Arabia pulls in most of Partners for Growth $450m capital push

Updated 07 February 2026
Nour El-Shaeri
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Saudi Arabia pulls in most of Partners for Growth $450m capital push

  • Global private credit fund leans into region’s largest market for growth-stage technology financing
Updated 07 February 2026
Nour El-Shaeri

RIYADH: Saudi Arabia has captured the vast majority of Partners for Growth’s capital deployed in the Gulf Cooperation Council, as the global private credit fund leans into what it sees as the region’s largest market for growth-stage technology financing. 

The San Francisco-based firm has deployed about $450 million in commitments in the GCC, and “the vast majority of that is in Saudi,” said Armineh Baghoomian, managing director at the firm who also serves as head of Europe, the Middle East and Africa and co-head of global fintech. 

The company was one of the earliest lenders to Saudi fintech unicorn Tabby, and it’s clear the Kingdom is providing fertile territory for ongoing investments.

“We don’t target a specific country because of some other mandate. It’s just a larger market in the region, so in the types of deals we’re doing, it ends up weighing heavily to Saudi Arabia,” Baghoomian said. 

Partners for Growth, which Baghoomian described as a global private credit fund focused on “growth debt solutions,” lends to emerging tech and innovation companies, particularly those that struggle to access traditional credit. 

“We’re going into our 22nd year,” she said, tracing the strategy back to its roots in a Bay Area investment bank debt practice in the mid-1980s. 

Today, the firm lends globally, she said, deploying capital where it sees fit across markets including Australia, New Zealand, and Southeast Asia, as well as Latin America and the GCC, where it has been active for about six years. 

Shariah structures dominate PFG’s Gulf deals 

In the Gulf, the firm’s structures are often shaped by local expectations. “Most of the deals we’ve done in the region are Shariah-compliant,” Baghoomian said. 

“In terms of dollars we’ve deployed, they’re Shariah-structured,” she added. 

“Usually it’s the entrepreneur who requires that, or requests it, and we’re happy to structure it,” Baghoomian said, adding that the firm also views Shariah structures as “a better security position in certain regions.” 

Growth debt steps in where banks cannot 

Baghoomian framed growth debt as a practical complement to equity for companies that have moved beyond the earliest stage but are not yet “bankable.” 

She said: “The lower-cost bank type facilities don’t exist. There’s that gap.”

Baghoomian added that companies want to grow, “but they don’t want to keep selling big chunks of equity. That implies giving up control and ownership.” 

For businesses with the fundamentals private credit providers look for, she said, debt can extend runway while limiting dilution. 

“As long as they have predictable revenue, clear unit economics, and the right assets that can be financed, this is a nice solution to continue their path,” she added. 

That role becomes more pronounced as equity becomes harder to raise at later stages, Baghoomian believes. 

She pointed to a gap that “might be widening” around “series B-plus” fundraising, as later-stage investors become “more discriminating” about which deals they back. 

Asset-heavy fintechs cannot scale on equity alone 

For asset-heavy technology businesses, Baghoomian argued, debt is not just an option but a necessity. 

She pointed to buy-now-pay-later platform Tabby as an example of a model built on funding working capital at scale. 

“Tabby is an asset-heavy business,” she said. “They’re providing installment plans to consumers, but they still need to pay the merchant on day one. That’s capital-intensive. You need a lot of cash to do that.” 

Equity alone, she added, would be structurally inefficient. “You would not want to just raise equity. The founders, employees, everyone would own nothing and lose a lot of control.” 

We don’t target a specific country because of some other mandate. It’s just a larger market in the region, so in the types of deals we’re doing, it ends up weighing heavily to Saudi Arabia.

Armineh Baghoomian, PFG managing director and head of Europe, the Middle East and Africa and co-head of global fintech

Baghoomian said those dynamics are common across other asset-intensive models, including lending platforms and businesses that trade in large inventories such as vehicles or property. “Those are businesses that inherently end up having to raise quite a bit of credit,” she said. Partners for Growth’s relationship with Tabby also reflects how early the firm can deploy capital when the structure is asset-backed. “We started with Tabby with $10 million after their seed round, and then we grew, and we continue to be a lender to them,” Baghoomian said. 

“On the asset-backed side, we can go in quite early,” she said. “Most of the fintechs we work with are very early stage, post-seed, and then we’ll grow with them for as long as possible.” 

As the market for private credit expands in the Gulf, Baghoomian emphasized discipline — both for lenders and borrowers. 

For investors assessing startups seeking debt, she said the key is revenue quality and predictability, not just topline growth. “Revenue is one thing, but how predictable is it? How consistent is it? Is it growing?” she said. “This credit is not permanent capital. You have to pay it back. There’s a servicing element to it.” 

Her advice to founders was more blunt: stress-test the downside before taking leverage. 

“You have to do a stress test and ask: if growth slows by 30 to 40 percent, can I still service the debt? Can I still pay back what I’ve taken?” she said. 

Baghoomian warned against chasing the biggest facility on offer. “Sometimes companies compete on how much a lender is providing them,” she said. “We try to teach founders: take as much as you need, but not as much as you can. You have to pay that back.” 

Partners for Growth positions itself as an alternative to banks not only because many growth-stage companies cannot access bank financing, but because it can tailor structures to each business. 

HIGHLIGHTS

• Partners for Growth positions itself as an alternative to banks not only because many growth-stage companies cannot access bank financing, but because it can tailor structures to each business.

• The firm lends globally deploying capital where it sees fit across markets including Australia, New Zealand, and Southeast Asia, as well as Latin America and the GCC, where it has been active for about six years.

One of Partners for Growth’s differentiators, Baghoomian said, is how bespoke its financing is compared with bank products. 

“These facilities are very bespoke. They’re custom to each company and how they need to use the money,” she said, adding that the fund is not offering founders a rigid menu of standardized options. 

“No two deals of ours look alike,” she said, framing that flexibility as especially important at the growth stage, when business needs can shift quickly. 

That customization, she added, extends beyond signing. Baghoomian said the firm aims to structure facilities so companies can actually deploy capital without being constrained, adding: “We don’t want to handcuff you. We don’t want to constrain you in any way.” 

As a company evolves, she said the financing can evolve too, because what works on day one often won’t fit nine months later. 

“We’ll revise structures,” she said, describing flexibility as core to how private credit can serve fast-moving tech businesses. 

She added that a global lender can also bring operating support and market pattern recognition, while still accounting for local nuance. 

Baghoomian expects demand for private credit in the Gulf to keep rising. “They are going to require credit, for sure,” she said, pointing to the scale of new platforms and projects. 

“I don’t see it shrinking,” she said, adding that Partners for Growth is seeing more demand and is in late-stage discussions with several companies, though she declined to name them. 

PFG to stay selective despite rising competition 

Competition among lenders has increased since the firm began deploying in the region, Baghoomian said, calling that “very healthy for the ecosystem.” 

Most of what the firm does in the region is asset-backed, Baghoomian said, often through first warehouse facilities for businesses financing receivables or other tangible exposures, “almost always Shariah.” 

Keeping Egypt on its watchlist 

Beyond the Gulf, Baghoomian said the firm is monitoring Egypt closely, though macroeconomic volatility has delayed deployments. 

“We looked at Egypt very aggressively a few years ago, and then the macro issues changed,” she said, adding that the firm continues to speak with companies in the country and track conditions. 

Even as private credit becomes more common in the region, Baghoomian underscored that debt is not universally appropriate. 

“Not every company should take a loan or credit,” she said. “You don’t take it just to take it. It should be getting you to the next milestone.” 

Topics: Partners for Growth Saudi Arabia

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