Domestic vehicle industry ventures should be set up in Saudi Arabia to reduce the country’s dependency on imports, a study by Saudi Arabia’s National Commercial Bank reportedly said, according to the Saudi Arabian News Digest.

According to the bank, investments should be made in car assembly, given the current shortage of car assembly ventures in the country. Investments should also be made in the tyre and spare parts sectors.

The report was published to background constant growth in the Saudi vehicle market, which was some 22.5 billion riyals ($US6 billion/€5.244) in 2002, and reached 29 billion riyals when tyres and spare parts were included.

Saudi vehicle imports are the highest in the Middle East with an annual average of 9.9 billion riyals between 1992 and 2002.

The population growth in Saudi Arabia in the past few years has also contributed to a 3.9% average annual growth in the sector. The reduction in customs duties on imports of vehicles to 5% from 12% from May 2001 was another factor in increased imports. The introduction of instalment payment schemes has led to a rise in purchasing power and 75,000 used cars were sold in 2002.