United Arab Emirates Autos Report Q3 2012

With the UAE set to achieve real GDP growth of 3% in 2012 according to the countrys Minister of Economy Sultan bin Saeed al-Mansouri, BMI is continuing to predict modest growth in the countrys auto sector. Although this represents a slight decline from the impressive 4.2% GDP growth seen in 2011, largely as a result of global macroeconomic issues, the countrys banking system has proven itself resilient since 2008 and oil prices are favourable. As such, BMI is forecasting overall auto sales of 455,102 for 2012, a small increase on the 448,569 vehicles sold in 2011. Although the UAE has no auto manufacturing sector to speak of, it remains a keen importer of vehicles and its luxury segment in particular is expected to continue to thrive, with the likes of Rolls Royce and Bentley seeing their bespoke customisation strategies paying dividends.

German automaker BMW had a strong Q112 – experiencing a 6% year-on-year (y-o-y) rise in car sales across the Middle East – and consumer spending is expected to gradually improve as confidence returns following the uncertainties of the Arab Spring. Two probable growth areas for the UAE auto sector include the auto finance sector, making vehicles more readily available in all price brackets; and sales and rentals of hybrid vehicles. Importer Al-Futtaim announced in late May 2012 that it had signed an exclusive deal to distribute US green auto specialist Fisker Automotives Karma plug-in hybrid in the UAE and more arrangements of this type are likely to follow as environmentally-friendly vehicles become increasingly commonplace and the technology is applied by big name manufacturers. Another area of increasing importance in the UAE autos market is the internet, with online media and social networking sites accounting for a large portion of the AED161mn (US$43.8mn) spent on car advertising in 2011, according to Zawya.

Internationally, auto sales are forecast to rise slowly in 2012, with growth anticipated in all major markets other than the eurozone, the problems of which will continue to have an indirect impact on the UAE. Asian markets remain resilient with China still leading the industry and major suppliers keen to tie-up partnerships with Chinese manufacturers. The spare parts and tyre industry holds significant opportunities for industry players in the Middle East, which ranks among the worlds fastest-growing markets for automotive products. This provides huge opportunities for areas such as Dubais Jebel Ali Free Zone (Jafza), where companies could find a local supply niche.

The price of this market report covers 4 quarterly reports on this sector. This quarterly report will be downloadable instantly as a PDF document, with the 3 remaining reports delivered at regular intervals throughout the year.