The automotive industry in UAE is one of the biggest sources of the country’s economic growth. It is currently the second largest automotive aftermarket in the Gulf Cooperation Council (GCC), and the sector plays a critical part in the economy as the country looks ahead. In fact, according to some reports, the GCC automotive market is expected to grow at a Compound Annual Growth Rate (CAGR) of almost 4.5% between 2019 and 2024, driven by strong macroeconomic factors such as rising disposable incomes, population increase, and urbanization.
The UAE government has prioritized developing the country’s automotive industry to tap into this regional growth. As Dubai enters a new development phase, it is also anticipated to become the region’s main automotive hub, expanding through exports and re-exports of vehicles in the Middle East.
In addition to supporting the country’s economic growth, this expansion of the automotive sector is also expected to create new jobs and opportunities for UAE residents. With its strong fundamentals and government support, the UAE’s automotive industry is well-positioned for continued growth in the years ahead.
Let’s look at the current UAE automotive aftermarket and the opportunities available for businesses looking to enter this industry
The Recovery Of The Automotive Aftermarket In The UAE
The automotive market in the UAE is one of the most vibrant and rapidly growing in the world. In recent years, car sales have been on the rise, with a significant increase in both the sum of vehicles sold and the profits generated by car sales. The current statistics are indicative of the sector’s massive market potential.
After dipping in 2020 during the COVID pandemic, the automotive market has shown signs of recovery with profitable sales across the board. Passenger car sales revenue is recorded upto $5.8 billion from August to September 2021. During that period, buyer interest even exceeded pre-COVID-19 numbers. The current statistics are evidence of the immense potential of the automotive market in the UAE and underscore the need for continued investment in this sector.
Automotive aftermarket distributors and manufacturers found it difficult to keep up with the demand, which will benefit the automotive market growth in UAE this year as they try to address the backlog. Luxury car brands became highly desirable, with prospective buyers paying premiums to ensure they get their units early.
The Demand For Cars In UAE Market
Large SUVs have long been the favored choice for families, thanks to their spacious interiors and rugged exterior design. However, there has been a shift in recent years from gas-guzzling SUVs in favor of more fuel-efficient options.
This is especially true in the United Arab Emirates, where hybrid and electric vehicles are becoming increasingly popular. New car sales are anticipated to increase by up to 30% in upcoming years as more auto brands are introduced to the market and production and shipments get up to speed with consumer demands.
The Used Car Market In Dubai
The Used Car Market also saw unprecedented growth, with many buyers opting for pre-owned models to save money. As a result of the strong demand, prices for both new and used cars are expected to continue to rise in upcoming years. This is good news for dealerships and manufacturers, but it may put some buyers on the sidelines. Those looking to purchase a car this year should act quickly to get the best selection and pricing.
Opportunities For Businesses In UAE Automotive Aftermarket
The automotive industry is booming in the UAE, and there are plenty of opportunities for both petroleum-powered and electric vehicles. The market for cars and components is large enough for everyone, and the city of Dubai is the perfect hub for the automotive trade. Global interest in Dubai will only increase, and companies looking to set up shop in the city will find the market ripe with opportunity.
Dubai’s location makes it a strategic choice for businesses in the automotive industry. It is situated near the Jebel Ali Port and Al Maktoum International Airport. It also benefits from recent infrastructure updates, which make it easy to get to and from the city.
The Dubai Industrial City is home to several businesses in the automotive industry, and the government provides support that helps them connect with the world’s biggest markets. This support includes initiatives such as providing training and development opportunities for employees, as well as access to the latest technology. As a result, Dubai is an increasingly attractive option for businesses in the automotive aftermarket.
The Role Of Digitalization
The country’s population is becoming more connected than ever, and this is having an impact on the way businesses operate. Automotive suppliers and industry players increasingly rely on digital platforms to reach consumers and conduct business. This trend is set to linger for a long time, and the outlook for the automotive industry in the UAE remains positive.
In A Nutshell
UAE automotive aftermarket offers wealthy opportunities to those willing to embrace and seize change.
If you are looking for Automotive aftermarket distributors in UAE, you may contact CTC – a member of Al Rostamani Company.