BrazilIn 5 charts: UAE's new passenger car sales market
After a number of subdued years, the UAE’s passenger car market is set for a healthy rebound, according to a new strategic market study by Glasgow Consulting Group.
Owing to slowdown in consumer buying, a shift from ownership to usership and a maturing second-hand car market, the sale of new passenger cars in the UAE dropped from a high in 2015 (408,000 cars) to 153,000 last year, although 2020’s drop was exacerbated by the economic impact of the Covid-19 induced downturn.
The market is however predicted to return to growth this year and in the coming years.
By 2024, total new car sales is expected to be (roughly) at the same level as in 2015, on the back of three main drivers: an improving economy emerging out of the Covid-19 crisis, a continued high dependence on personal cars for commuting, and an accelerated shift to electric vehicles and luxury cars.
As it stands, Japanese brands dominate the UAE market with a market share of 70%. Toyota has been the consistent market leader in the 2015 to 2020 period, followed by Nissan and Mitsubishi.
South Korean car makers have meanwhile been gradually increasing their market share in the region over the past years.
In total, the UAE has around 3.5 million cars on the road, 40% of which drive around in Dubai.
Notably, the percentage of SUV’s in the UAE is relatively high compared to other countries in the world, at 43%. Over half of all cars (53%) are seven years or older.
In the slipstream of growing new car sales, UAE’s car insurance market is expected to increase in 2021 to a total market value of AED 9.8 million.
In particular among drivers of luxury cars and expatriates demand for motor insurance is on the up – as they are accustomed to the concept of insurance as a risk mitigation tool.
In related news, a recent study by KPMG found that the UAE ranks within the top ten countries worldwide for automated vehicles readiness. Having set up a regulatory framework for autonomous passenger transport in 2017, Dubai is seeking to lead the charge, and hopes to reach 25% self-driving penetration across its transportation landscape by 2030.
About Glasgow Consulting Group
Founded in 2010, Glasgow Consulting Group is a business research and strategic advisory firm, with core expertise in market intelligence, market entry and trade development. The firm operates with two offices in the Middle East, in Dubai (headquarter) and Riyadh, and has further international offices in Harare and Auckland.
