Kuwait New Vehicle and Used Vehicle Market Outlook to 2028

Kuwait New Vehicle and Used Vehicle Market Overview

• The Kuwait new vehicle and used vehicle market, based on a five-year historical analysis, is valued at USD 4.82 billion. This market is primarily driven by increasing consumer demand for affordable vehicles and government support in terms of regulatory leniency for used vehicle imports. Additionally, the presence of affluent buyers, coupled with competitive financing options, is fuelling the new vehicle segment.
• Kuwait City and Al Ahmadi dominate the market due to their concentration of high-income residents and business hubs, which drive demand for both premium new vehicles and high-quality used vehicles. These cities are also home to many automotive dealerships and service centres, reinforcing their leadership in the market.
• The Kuwaiti government has introduced strict import quotas and certification requirements for vehicles to ensure safety and environmental compliance. In 2023, all imported vehicles were mandated to meet Euro 5 emission standards, a shift from earlier lenient regulations. Additionally, vehicles older than five years are no longer permitted for importation, affecting the used vehicle market. These regulations have led to a more controlled inflow of vehicles, ensuring that only models meeting global standards are allowed in the market. This has encouraged dealerships to improve the quality of vehicles on offer, further boosting consumer confidence.

Kuwait New Vehicle and Used Vehicle Market Segmentation

• By Vehicle Type: The Kuwait market is segmented by vehicle type into passenger cars, commercial vehicles, light trucks, and heavy trucks. Passenger cars hold the dominant market share due to their widespread demand among urban consumers for personal use. The high level of disposable income among Kuwaiti residents further propels this segment. Commercial vehicles are also growing steadily, driven by infrastructure development and logistics needs, especially in industrial areas like Al Ahmadi.

• By Fuel Type: Kuwait’s vehicle market is segmented by fuel type into gasoline, diesel, hybrid, and electric vehicles. Gasoline vehicles continue to dominate, supported by Kuwait’s vast oil reserves and government subsidies on fuel. Electric vehicles (EVs), although in the early stages, are expected to grow in popularity as global trends toward sustainable transportation influence consumer choices.

Kuwait New Vehicle and Used Vehicle Market Competitive Landscape

The Kuwait automotive market is highly competitive, and dominated by major global and local players. Key competitors include leading automotive manufacturers and dealership groups that cater to both new and used vehicle buyers. These companies have strong brand recognition, comprehensive after-sales service networks, and attractive financing options, positioning them favourably in the market.

Kuwait New Vehicle and Used Vehicle Market Analysis

Kuwait New Vehicle and Used Vehicle Market Growth Drivers

• Economic Stability and Oil Revenues: Kuwait's economy remains highly dependent on oil, which accounts for over 90% of government revenues, making economic stability closely tied to global oil prices. In 2024, oil production in Kuwait was forecasted to reach around 2.6 million barrels per day, reinforcing the government's ability to maintain fiscal stability and invest in infrastructure, including transportation. This consistent revenue flow creates a favorable environment for the new vehicle market, as consumers benefit from government subsidies and low inflation rates. The Kuwaiti dinar remains one of the world's most stable currencies, further contributing to disposable income growth.
• Growing Urban Population: Kuwait's urban population reached 3.3 million people in 2023, with a steady growth trajectory driven by infrastructure development and urbanization initiatives. As 98% of Kuwait’s population resides in urban areas, the demand for personal vehicles is rising, particularly as vehicle ownership is seen as a status symbol in the region. Additionally, Kuwait's vehicle ownership rate is among the highest in the Gulf region, with around 800 vehicles per 1,000 people. This trend continues to drive both the new and used vehicle markets, as urban dwellers increasingly prioritize convenience and mobility.
• Demand for Affordable Mobility Solutions: With a growing middle class and expatriate population, the demand for affordable mobility solutions is rising in Kuwait. In 2023, the number of registered vehicles in Kuwait surpassed 2.5 million, with a notable portion being economy-class models. Used vehicles, in particular, are in high demand due to their affordability, with over 60% of vehicles purchased in 2023 being pre-owned. The rising fuel prices have also contributed to a shift in consumer preferences, with more buyers opting for fuel-efficient or hybrid vehicles, further boosting the used vehicle market.

Kuwait New Vehicle and Used Vehicle Market Challenges

• Regulatory Changes: Kuwait has introduced stricter emissions standards for vehicles to align with global environmental norms. The new regulations, implemented in 2023, require imported vehicles to comply with Euro 5 emissions standards, leading to additional costs for manufacturers and importers. Furthermore, changes in import duties have increased operational costs for vehicle dealers, making it challenging for them to maintain competitive pricing. Importers now face increased scrutiny on older vehicle models, which has slowed the inflow of certain used vehicle categories, impacting overall supply.
• Market Saturation: Kuwait’s used vehicle market is facing supply chain constraints due to increased demand and limited inventory. In 2023, the number of available pre-owned vehicles declined by 8%, according to customs data, due to delays in imports from key markets like Japan and the United States. Market saturation, especially in the lower-end vehicle segment, has led to a price hike for used cars, pushing some buyers towards new vehicles. Furthermore, logistical bottlenecks, including delays at ports and limited warehousing capacity, continue to challenge the smooth flow of used vehicles into the market.

Kuwait New Vehicle and Used Vehicle Market Future Outlook

Over the next five years, the Kuwait new vehicle and used vehicle market is expected to witness steady growth. This will be driven by ongoing government initiatives to diversify the economy, investments in infrastructure, and the increasing adoption of electric vehicles. Furthermore, the rise in online vehicle platforms and a growing preference for certified pre-owned cars will continue to shape the market dynamics.

Kuwait New Vehicle and Used Vehicle Market Opportunities

• Expansion of Online Vehicle Sales Platforms: The digitalization of the automotive market is a major opportunity in Kuwait. As of 2024, online vehicle sales platforms such as CarSwitch and Carzaty have seen a 20% year-on-year growth in user engagement. E-commerce penetration in Kuwait is among the highest in the region, with over 80% of the population using the internet regularly. This trend provides a growing market for online vehicle transactions, particularly in the used vehicle segment. The convenience of browsing inventory, comparing prices, and completing purchases online drives the market towards greater digital integration.
• Increasing Demand for Hybrid and Electric Vehicles: Kuwait’s push towards sustainability has led to a growing demand for hybrid and electric vehicles. In 2023, the number of hybrid vehicles on the road exceeded 10,000, supported by government initiatives offering tax reductions and subsidies for EV purchases. While the electric vehicle market is still nascent, infrastructure development, such as charging stations, is rapidly expanding, with 50 new charging stations planned for installation in 2024. This shift towards greener transportation solutions presents a major opportunity for both new and used vehicle markets, particularly in urban areas.