Concentration Ratio of Automotive Industry in Saudi Arabia

            Concentration ratio shows the size of the firms with respect to the industry as whole. If the concentration ratio is lower in the industry than it means that the level of competition would be higher in the industry. However, the concentration ratio near 100% indicates monopoly in the market. The concentration ratio shows whether there are large organizations working in the industry or there are huge number of small organizations. The concentration ratio of the Saudi Automotive industry is calculated by determining the market share of the largest corporations who are working in the industry. The following table contains the main larger players in the Saudi Automotive industry:

        The concentration ratio of the Saudi Automotive industry is 81% which is indicating that the Saudi Automotive is an oligopoly market. The automotive industry of Saudi Arabia is based on small number of large organizations which is the characteristic of oligopoly market.

Herfindahl-Hirschman Index (HHI) of Automotive Industry in Saudi Arabia

        The HHI index indicates the level of concentration of the industry. If the industry is highly concentrated then it means that monopolistic situation prevails in the industry. If the industry is low concentrated than it means that perfect competition exists in the industry. The HHI of the Saudi Automotive industry is computed to evaluate the level of concentration. The following tables contains HHI of the automotive industry:

The HHI of the Saudi Automotive industry is indicating that the automotive industry is moderately concentrated. It means that the competition in the industry is moderate and organization are competing with each other to grab the market share.