The diversion of ships and delays in arrival at the port have slowed down the supply of original spare parts (OEM), and the market estimates that spare parts prices may have room to increase by up to about 25%...

[Riyadh News] Affected by tight shipping in the Red Sea and regional geopolitical risks, the Saudi automobile aftermarket is feeling more direct logistics pressure. Local media reported that ship rerouting and delays in arrival at port have led to a slowdown in the supply of original spare parts (OEM), and the market estimates that spare parts prices may have room to increase by up to about 25%. The rising costs of freight, shipping insurance, etc., and the widening gap between supply and demand are pushing car owners 'daily maintenance and sudden repairs into a new normal of "more expensive and slower".

The report pointed out that the impact of changes in shipping routes is first reflected in the delivery cycle: the arrival time of original parts at the port is prolonged, and some popular parts are in short supply, and prices rise accordingly. For Saudi consumers, the maintenance budget no longer depends only on the parts themselves, but also on whether the goods can be obtained in time and whether they need to pay higher expedited costs.

In an environment of tight supply,"refurbished parts/remanufactured parts" and domestic substitution have begun to become realistic options. The report believes that Saudi Arabia's local manufacturing industry, driven by Vision 2030, is accelerating the layout of automotive parts, especially consumables such as filters and brake pads, as well as some body parts, and demand is tilting towards local factories. Such alternatives have advantages in price and delivery times, and also help reduce reliance on global supply chains and give car owners more flexibility in budget management.

However, the period of shortage is often the breeding period for counterfeit goods. The price increase of parts and tight supply of supplies will stimulate the circulation of counterfeit and adulterated products. The appearance of such products may be similar to the original parts, but they lack quality and safety standards, which can cause serious mechanical failure, or in serious cases, leading to traffic accidents. The Saudi Organization for Standards, Metrology and Quality (SASO) has repeatedly reminded consumers to be alert to the risks of counterfeit and shoddy accessories and avoid purchasing products with "abnormally low prices" through unauthorized channels or unreliable platforms.

[Brief Comment] The upward trend in Saudi parts prices will change buyers 'decision-making logic: when maintenance cost expectations deteriorate, buyers will care more about "whether the car is easy to repair in the future and whether the parts are easy to buy." Therefore, the selection and quotation negotiation of models exported to Saudi Arabia cannot only rely on the price of the car, but also include the availability of commonly used parts, the quality of substitute parts, and the spare parts guarantee capabilities of cooperative repair shops/channels into the sales plan. In the short term, the price increase of original parts may increase the total cost of ownership (TCO), which is unfavorable for some models with small ownership and weak component systems; but for models with large ownership, high versatility of parts, and usable remanufactured parts or local substitutions, it may be easier to deal with.

Source of information:https://saudiauto.com.sa/Ø ‰ ±-‰„Š„‚‚ˆ

Source: Guangdong Good Car

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