Saudi Arabia Launches Its First-Ever Domestically Designed Car

Arieh O’Sullivan
Thursday, December 09, 2010

Dubbed the Aseela, ‘original’ in Arabic, the sedan is geared to the low-cost market

It’s called the “Original” and marks the first time Saudi Arabia has launched a domestically designed and manufactured automobile sedan.

The four-passenger Aseela was revealed in Riyadh at the International Exhibition for Motor Vehicles this week. The Aseela was designed by King Abdul Aziz City for Science and Technology (KACST), and officials said it was to serve as the basis for a domestic auto manufacturing industry that Saudi Arabia is trying to develop.

There were few details released, but the sedan was touted to be lower in cost than imports. Exhibited at the motor show, the simple four-door model was reported being priced at no more than $13,300.

The Saudi vehicle was designed and built by the National Program for Automobile Technology, an affiliate of KACST. KACST estimated that the cost of its production line was about $16 million and had the capacity to produce between 2,000 to 5,000 cars annually.

That would be a drop in the bucket in an auto market that Business Monitor International forecasted earlier this year would grow from 676,000 units to 880,000, an increase of just over 30%, between 2010 and 2013.

“This would certainly open up possibilities for employment,” Ali Abdul-Rahman Al-Mazad, a Saudi economic columnist, told The Media Line. “This won’t be easy but perhaps they will be able to receive aid from foreign car manufacturers.”

He added that foreign car companies had been interested in opening assembly plants in Saudi Arabia in order to lower costs for cars to be sold in the region.

Saudi Arabia has become infamous in the Arab world in general, and in the Gulf in particular, for the local appetite for expensive cars. Yet, the small car segment is the fastest growing market in the Saudi Arabian automobile industry. It accounted for about a quarter of all vehicles sold this year. Leading industry analysts have said that this was due to increased demand for four-seater sedans.

“There is a potential market for this since there’s a wide gap in salaries and there are those looking for lower end cars,” Paul Martin, one of the founders of Street Kings Arabia, a Saudi aficionado group, told The Media Line.

Last March, engineers from King Saud University debuted the sports utility vehicle (SUV) Ghazal, the first vehicle said to be designed and manufactured in Saudi Arabia. The government is currently seeking investments between $400 million and $500 million to manufacture 20,000 units of the SUV over the next three years in KSU’s technology valley in Riyadh.

KACST calls itself an independent scientific organization that reports to the prime minister. It is also seen as Saudi Arabia’s national science agency and its national laboratories, which could mean it will be able to receive government funding.

Saad Al-Wallan, chairman of Al-Wallan Trading Company, which imports Hyundai cars, said the year 2010 has recorded a 25% growth in the small car market.

"The growth of 25% that we have seen is in the small car segment. Sales of small cars is certainly the biggest growth segment in Saudi Arabia automobile industry," he was quoted as saying in The Saudi Gazette.

One of the Middle East's largest car markets, automobile sales make up about 3% of Saudi Arabia's gross domestic product. Including both commercial automobiles and transport infrastructure, the kingdom’s car market is worth about $9 billion. With a population of just under 25 million, over half a million vehicles are imported into Saudi Arabia annually and new car sales have steadily increased since the country began barring the import of used cars four years ago.

Over the past two decades, Saudi Arabia has recorded four million traffic accidents, leading to 86,000 deaths and 611,000 injuries, 7% of which resulted in permanent disabilities. A recent KACST study warned that if the current rise in road accident rates is not curbed, Saudi Arabia will have over four million traffic accidents a year by 2030. Little is known about the new car, particularly about its safety features.

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Source: The Media Line.
Link: http://www.themedialine.org/news/news_detail.asp?NewsID=30771.