UAE Automotive Retail Market To Worth Over US$ 25.16 Billion By 2032 | Astute Analytica

New Delhi, Nov. 11, 2024 (GLOBE NEWSWIRE) -- UAE automotive retail market is projected to hit the market valuation of US$ 25.16 billion by 2032 from US$ 7.06 billion in 2023 at a CAGR of 15.29% during the forecast period 2024–2032.

The UAE automotive retail market in 2023 presents substantial opportunities driven by economic growth and consumer spending power. The market benefits from the country's strategic location, facilitating the import of vehicles worth over US$ 12.9 billion. Investment opportunities abound in electric mobility, with the government allocating $2 billion towards EV infrastructure (Source: UAE Energy Strategy 2050, 2023). The luxury car segment is expanding, with sales exceeding 80,000 units (Source: Arabian Business, 2023). High per capita income, averaging $45,000, supports robust consumer purchasing power (Source: World Bank, 2023), making the UAE an attractive market for automotive retailers.

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Key trends shaping the automotive retail market include the rise of electric vehicles, with EV sales reaching 8,000 units (Source: Dubai Electricity and Water Authority, 2023). Government incentives contribute to this growth, offering perks that save EV owners up to $2,700 annually (Source: Dubai Roads and Transport Authority, 2023). Digital transformation is significant, with over 30,000 vehicles sold through online platforms (Source: Emirates News Agency, 2023). Consumers prefer virtual showrooms and contactless transactions. Demand for connected cars is growing, with 60,000 vehicles equipped with advanced features sold in 2023 (Source: Etisalat UAE, 2023), indicating a shift towards technological innovation.

Emerging demand in the automotive retail market focuses on sustainability, technology, and luxury. The hybrid vehicle segment saw sales of 22,000 units (Source: Toyota UAE, 2023), reflecting environmental consciousness. Autonomous vehicle technology gains interest, with pilot programs deploying 100 self-driving taxis in Dubai (Source: Dubai Future Foundation, 2023). The luxury market remains strong, with brands like Rolls-Royce selling a huge number of cars in the country. The combination of economic stability, consumer affluence, and technological adoption positions the UAE automotive retail market for continued growth and innovation.

Key Findings in UAE Automotive Retail Market

UAE's Automotive Triumph in 2023: Dealerships, New Cars, and Individual Buyers Lead the Way

In 2023, the United Arab Emirates' automotive retail market is witnessing a significant dominance of traditional dealerships over online retail platforms. With over 500 authorized car dealerships operating across the UAE, these establishments have become the cornerstone of automotive sales. The tangible experience offered by dealerships, including personalized customer service and immediate access to vehicles, resonates with consumers in a country where the population exceeds 9 million people. The cultural preference for face-to-face interactions and the ability to inspect and test-drive vehicles has solidified dealerships' superior position in the market.

The market is predominantly led by new car sales capturing over 56.59% market share, with annual figures reaching approximately 277,000 units. This segment generates higher revenue compared to used cars, spare parts, and financial services, largely due to consumers' desire for the latest technology and luxury. In 2023, luxury car sales alone contributed a significant revenue to the market, with popular brands like Mercedes-Benz, BMW, and Lexus leading the charge. The government's favorable policies, such as low import tariffs and recent initiatives promoting electric vehicles (EVs), have spurred growth. Projections indicate that EV sales could reach 12,800 units annually by 2025, signaling a shift towards sustainable transportation solutions.

Individual buyers remain the largest consumers with over 81.84% market share in the UAE automotive retail market, owning over 3 million registered vehicles. This trend is driven by high per capita income and the cultural significance of personal vehicle ownership. Accessible financing options have bolstered this dominance, with banks and financial institutions reporting auto loan portfolios exceeding $20 billion in 2023. Conversely, fleet operators have shown restraint in large-scale purchases due to increased operational costs and market competition. Looking ahead, the market anticipates an annual increase of 100,000 new private vehicles, reinforcing the pivotal role of individual buyers in propelling the UAE's automotive industry forward.

Digital Transformation and E-Commerce Integration Taking UAE Automotive Retail Market to New Height

The UAE's automotive retail sector is rapidly embracing digital transformation, integrating online platforms with traditional dealership models to enhance customer experience. In recent years, online research has played a crucial role in automobile purchases, with over 70% of buyers utilizing digital platforms for vehicle information and comparisons before visiting showrooms. In 2023, the online automotive market in the UAE was valued at approximately US$ 500 million, reflecting a 20% year-on-year growth. Major automotive retailers reported a 30% increase in online inquiries and virtual showroom visits compared to the previous year. The adoption of technologies such as virtual reality (VR) showrooms, augmented reality (AR) features for vehicle customization, and AI-driven customer service chatbots is reshaping the purchasing journey, providing consumers with seamless and personalized experiences.

Rise of Vehicle Leasing and Subscription Services

There is a notable shift towards vehicle leasing and subscription models in the UAE automotive retail market, driven by a desire for flexibility and cost-effectiveness. The leasing market saw a robust growth of 15% in 2023. Approximately 25% of new vehicles registered in 2023 were through leasing agreements, a significant rise from 18% in 2020. Younger consumers, particularly millennials and Generation Z, constitute a major segment of this market, accounting for 65% of leasing customers. The introduction of vehicle subscription services, which allow users to access different car models on a monthly basis, has also gained momentum, with subscription-based services experiencing a 25% increase in user numbers in 2023.

Growth of the Automotive Aftermarket

The UAE's automotive aftermarket sector is experiencing substantial growth in the automotive retail market, fueled by the increasing number of vehicles on the road and a rising demand for maintenance and customization services. In 2023, the aftermarket industry was valued at US$ 500 million, with projections indicating a CAGR of 5% from 2024 to 2030. The vehicle parc (vehicles in operation) exceeded 3.6 million units, with an average vehicle age of 6 years, underscoring the need for regular maintenance and spare parts. Tire replacements accounted for 35% of aftermarket sales, followed by batteries at 20%, and accessories and customization at 15%. The growth of e-commerce platforms specializing in automotive parts has also contributed to the sector's expansion, with online aftermarket sales growing by 30% in 2023.

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Investment in Autonomous and Connected Vehicle Technologies

The UAE is at the forefront of adopting autonomous and connected vehicle technologies. In 2023, investments in automotive technology and related infrastructure reached US$ 500 million, focusing on autonomous driving, connectivity, and smart mobility solutions. Dubai launched pilot programs for autonomous taxis and buses, aiming to make 25% of all transportation trips in the city autonomous by 2030. Consumer interest in advanced vehicle technologies is high, with surveys indicating that 60% of UAE residents are willing to use self-driving cars once they become available. Additionally, connected car features, such as in-car Wi-Fi, advanced driver-assistance systems (ADAS), and infotainment systems, are becoming standard expectations among consumers.

Growth in Shared Mobility Services Giving Boost to Automotive Retail Market

Shared mobility services, including ride-hailing and car-sharing platforms, are expanding rapidly in the UAE. The ride-hailing market was valued at US$ 1.3 billion in 2023, with a 12% growth compared to the previous year. Car-sharing services experienced a staggering 30% increase in users, reaching over 200,000 active subscribers. Factors contributing to this growth include urbanization, increasing traffic congestion, and a growing preference for cost-effective and convenient transportation alternatives. Government initiatives promoting shared mobility to reduce traffic and environmental impact are also playing a significant role. For instance, the Roads and Transport Authority (RTA) aims to increase the share of public and shared transport in Dubai to 26% by 2030.

Strategic Maneuvers in the UAE Automotive Retail Market: The Battle for Market Supremacy as Top 6 Players Control Over 62% Market Share

The UAE automotive retail market is fiercely competitive, with six major players-Al Futtaim Motors, Al Habtoor Motors, Al Tayer Group, Abdul Latif Jameel IPR Company Limited, Dynatrade Auto Service, and Al Ghandi Auto-commanding over 62% of the market share. These companies have established their dominance through strategic brand alliances, expansive dealership networks, and superior customer service offerings. The market is heavily influenced by consumer preferences for premium vehicles, and companies are increasingly focusing on hybrid and electric models to align with global sustainability trends. Additionally, the adoption of digital platforms for sales and customer interaction is playing a significant role in shaping the competitive landscape, as companies seek to enhance customer experience and streamline operations.

Leading the charge is Al Futtaim Motors, which holds a commanding 18.60% market share in the automotive retail market. Al Futtaim's success is rooted in its exclusive partnerships with renowned brands like Toyota, Lexus, and Honda, offering a diverse portfolio that caters to a wide range of consumer needs. The company's strength lies in its comprehensive service network and its commitment to customer satisfaction, which have been pivotal in fostering brand loyalty. Furthermore, Al Futtaim Motors has been proactive in embracing digital transformation, utilizing online platforms to facilitate seamless customer interactions and transactions. By investing in sustainability initiatives and expanding its electric vehicle offerings, Al Futtaim Motors is positioning itself as a forward-thinking leader in the market, ready to meet the demands of an increasingly eco-conscious consumer base.

The dominance of Al Futtaim Motors and its competitors in the UAE automotive retail market underscores the importance of strategic foresight and adaptability. While Al Futtaim leads the pack, other players like Al Habtoor Motors and Al Tayer Group are intensifying efforts to capture greater market share through innovative marketing strategies and expanded service offerings. As the market continues to evolve, driven by technological advancements and changing consumer preferences, these companies are poised to leverage their strengths to maintain competitiveness and capitalize on new growth opportunities.

UAE Automotive Retail Market Major Players

• Al Futtaim Motors
• Al Habtoor Motors
• Al Tayer Group
• Abdul Latif Jameel IPR Company Limited
• Dynatrade Auto Service
• Al Ghandi Auto
• Other Prominent Players

Market Segmentation:

By Service Type

• Dealership
• Online Retail

By Coverage

• New Car
• Used Car
• Service & Parts
• Finance & Insurance

By End User

• Individual
• Fleet Operator

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