Will women driv­ers turn buy­ers?

Car mak­ers hope for new sales when Saudi ban is lifted

Baltimore Sun - - MARYLAND - By Aya Ba­trawy and Tom Kr­isher

DUBAI, United Arab Emi­rates — What’s your dream car to drive? Saudi women are ask­ing that ques­tion af­ter the king­dom an­nounced that women would be granted li­censes and be al­lowed to drive for the first time.

An Ara­bic Twit­ter hash­tag ask­ing women what car they want to drive al­ready had more than 22,000 re­sponses on Thurs­day. Some users shared im­ages of black matte lux­ury SUVs. Oth­ers teased with im­ages of metal­lic candy pink-col­ored cars. A few shared im­ages of cars en­crusted with sparkly crys­tals.

Car mak­ers see an op­por­tu­nity to rev up sales in Saudi Ara­bia when the royal de­cree comes into ef­fect next June. But any gains are likely to be grad­ual due to a mix of so­ci­etal and eco­nomic fac­tors. Women who need to get around al­ready have cars driven by chauf­feurs. And many women haven’t driven in years, mean­ing the next wave of buy­ers could be the young.

That didn’t keep Ford and Volk­swa­gen from try­ing to make the most of the mo­ment. They quickly re­leased ads on Twit­ter con­grat­u­lat­ing Saudi womenon the right to drive. Saudi Ara­bia had been the only coun­try in the world to still bar women from get­ting be­hind the wheel.

Ford’s ad showed only the eyes of a woman in a rearview mir­ror with the words: “Wel­come to the driver’s seat.” Volk­wa­gen’s ad showed two hands on a steer­ing wheel with in­tri­cate henna de­signs on the fin­gers with the words: “My turn.”

Check­ing that op­ti­mism When fi­nally al­lowed to, Saudi women could sim­ply start driv­ing the ve­hi­cles they al­ready own, some an­a­lysts say. will be the re­al­ity that many women will con­tinue to need the ap­proval of a man to buy a car or take on new re­spon­si­bil­i­ties.

“The fam­ily has al­ways op­er­ated on the ba­sis of de­pen­dency so that’s a big core re­struc­tur­ing of the fam­ily unit,” said Madeha Ala­jroush, who took part in Saudi Ara­bia’s first cam­paign to push for the right to drive.

In that 1990 protest, 47 women were ar­rested. They faced stigma­ti­za­tion, lost their jobs and were barred from trav­el­ing abroad for a year.

“I had no idea it was go­ing to take like 27 years, but any­way, we need to cel­e­brate,” Ala­jroush said.

That won’t en­tail buy­ing a new car, though. She hasn’t driven in nearly 30 years, she says, and her two daugh­ters still need to learn how to op­er­ate a ve­hi­cle.

Al­low­ing women the right to drive is seen as a ma­jor mile­stone for women’s rights in Saudi Ara­bia, but also for the Saudi econ­omy. The king­dom’s young and pow­er­ful crown prince is be­hind a wide-reach­ing plan to trans­form the coun­try and wean it off its re­liance on gov­ern­ment spend­ing from oil ex­ports.

Al­low­ing women to drive helps to en­sure stronger fe­male par­tic­i­pa­tion in the work­force and boosts house­hold in­comes. It can also save women the money they now spend on driv­ers and trans­porta­tion.

The Saudi gov­ern­ment says there are 1.37 mil­lion driv­ers in the coun­try, with the ma­jor­ity from South Asian coun­tries work­ing as driv­ers for Saudi women. The driv­ers earn an av­er­age monthly salary of around $400, but the costs of hav­ing a driver are much higher. Fam­i­lies must also pay for their en­try per­mits, res­i­dence per­mits, ac­com­mo­da­tion, flight tick­ets and re­cruit­ment.

Re­becca Lind­land, an analyst for Cox Au­to­mo­tive in the U.S. who has stud­ied the Saudi Ara­bian mar­ket, said fam­i­lies with the means likely al­ready have enough ve­hi­cles be­cause women are al­ready be­ing trans­ported in them, with male driv­ers. Those women could sim­ply start driv­ing the ve­hi­cles they al­ready own.

There are also many Saudi fam­i­lies who do not have the money to buy new cars.

“The idea that 15 mil­lion women are go­ing to go out and buy a car is not re­al­is­tic,” Lind­land said. “We­may not have in­cre­men­tal sales be­cause those that are al­ready with more free­doms al­ready prob­a­bly have ac­cess to a car.”

The in­dus­try con­sult­ing firm LMC Au­to­mo­tive sees only a small boost in sales next year due to the royal de­cree, coin­cid­ing with a small re­cov­ery in sales from a slump.

The Saudi mar­ket peaked at 685,000 new ve­hi­cles sold in 2015, fall­ing to un­der 600,000 in 2016, and is fore­cast to fin­ish this year at 530,000. LMC had pre­dicted a mod­est re­cov­ery next year based on an im­proved econ­omy and sees a lit­tle added boost from women driv­ers.

Although Saudi Ara­bia has a rep­u­ta­tion for lik­ing lux­ury goods, main­stream brands dom­i­nate the car mar­ket with a 93 per­cent share of sales, ac­cord­ing to LMC. Hyundai was the top pas­sen­ger car brand with a 28.6 per­cent share of the mar­ket, fol­lowed closely by Toy­ota at 28.4 per­cent and Kia at 8.3 per­cent, the com­pany said.

There are also so­ci­etal fac­tors to con­sider. Even if the law al­lows women to drive, many will still need their fa­thers or hus­bands to buy a car.

A male guardian­ship sys­tem in Saudi Ara­bia gives men fi­nal say over women’s lives, from their abil­ity to travel abroad to mar­riage. Women of­ten are asked to have the writ­ten per­mis­sion of man to rent an apart­ment, buy a car or open a bank ac­count.

“If you don’t have credit, if you don’t have money, your male guardian will be the one to de­cide whether you buy a car or not,” Lind­land said.

While car sales might rise in the long-term, ride hail­ing apps like Uber and lo­cal ri­val Ca­reem could see rev­enues de­cline. Fe­male pas­sen­gers make up the ma­jor­ity of the coun­try’s ride­hail­ing cus­tomers.

To cel­e­brate Tues­day’s de­cree, sev­eral Saudi women posted im­ages on so­cial me­dia delet­ing their ride shar­ing apps.

The two com­pa­nies, how­ever, have seen strong in­vest­ments from Saudi Ara­bia. Last year, the Saudi gov­ern­ment’s sovereign wealth fund in­vested $3.5 bil­lion in Uber. This year, an in­vest­ment firm chaired by bil­lion­aire Saudi Prince Al­waleed bin Talal in­vested $62 mil­lion in Dubai-based Ca­reem.

Ala­jroush says the right to drive will not im­me­di­ately change women’s lives, but it will change fam­ily dy­nam­ics at home and will change the econ­omy.

“Men used to leave work to pick up the kids. The whole coun­try was par­a­lyzed,” she said. “It’s a re­struc­tur­ing of how we think, how we op­er­ate, how we move.”


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