Saudi Gazette report

RIYADH — Saudi Arabia’s Ministry of Commerce and the General Authority for Competition have recently held several meetings to address the growing concentration in the automotive sector, particularly regarding the registration of additional dealership agreements for car distribution.

Sources told Okaz that the Competition Authority has begun reviewing market concentration resulting from new distribution agreements, in coordination with the Ministry of Commerce.

The authority has started receiving applications from companies seeking to register such vertical agreements, with plans to release a comprehensive guide to help companies comply with competition regulations and avoid anti-competitive practices.

The move follows the authority’s recent investigation into entities operating in car sales, after-sales services, and spare parts, the findings of which have been submitted to higher authorities. It is now examining potential economic concentration cases in the sector.

In 2023, the authority brought charges against 79 companies, including agents and distributors, for engaging in anti-competitive conduct such as price-fixing and dividing markets by geographic region.

Criminal cases were filed against 64 firms, while 15 submitted settlement proposals under review.

The developments come as the car market in Saudi Arabia sees increased regulatory scrutiny. In a recent case, the Ministry of Commerce ordered a car agency to cancel an illegal policy requiring full upfront payment at the time of booking.

The ministry has since mandated that dealerships request only a partial down payment to confirm bookings and summoned the violating agency for further legal proceedings.