Saudi Arabia plans to focus more on automotive market 

(MENAFN - Khaleej Times) Saudi Arabia scored 52.1 points (out of a theoretical maximum of 100) in the BMI automotive business environment rating this quarter, putting it 2.7 points behind Turkey and 0.1 points ahead of Kuwait.

Placed in fourth, Saudi Arabia has the largest automotive market in the Gulf Cooperation Council, but its score was pulled back by economic uncertainty and rising inflation, which have impacted on car sales growth.

The kingdom falls behind other Gulf states due to its lower country structure score, in particular the labour market. A lack of automotive production and stringent foreign ownership laws also weigh down Saudi Arabia's score.

On the upside, despite being the largest automotive market in the Gulf, Saudi Arabia has the best penetration potential with a low per capita rate of vehicle ownership.

The introduction of legislation to enable women to drive would help raise vehicle ownership significantly. Saudi Arabia's score would be much improved if it can establish large-scale automotive production facilities.

The kingdom's automotive industry is small and is focused on truck and bus assembly, but there is room for growth. In April 2008, Japanese truck manufacturer Isuzu was reportedly considering local production of its trucks in Saudi Arabia based on its strong sales in the kingdom.

Details have yet to be finalised and Isuzu has denied reports in the Nikkei daily that it will start production as early as next year through a joint venture.