UAE economic modernisation drives growth in truck market

14 February 2023 Consultancy-me.com 4 min. read

After years of slow growth, the UAE’s truck market is set for a shift in gear in the coming years, buoyed by public investment in infrastructure and logistics, according to new research by Glasgow Research & Consulting.

In the UAE, the market for trucks is dominated by pickups, light-duty, and medium trucks. The three Emirates of Dubai, Abu Dhabi and Sharjah account for more than 70% of all revenues booked in the commercial trucks market, on the back of their economic development and large-scale construction activities.

Sectors like manufacturing, construction, retail, and transportation are the major applications of the truck market. The heavy-duty truck segment is much smaller. These types of trucks typically have a gross vehicle weight of around 16 tons and more, and are used in select sectors such as waste management as dump trucks.

The UAE’s truck market is expected to shift gear

In recent years, the UAE’s truck market has not seen a significant expansion, but according to the study by Glasgow Research & Consulting, that is all about to change. The researchers point at five main drivers lifting demand for trucks.

Economic change

By the authors’ reckoning, due to the truck industry’s place at the heart of the UAE’s logistical value chains, it is set to ride the crest of an economic wave ushered in by the country’s attempts to diversify the economy.

Due to the government’s attempts to shift away from its dependence on oil, the UAE is in fact positioned to buck the global trend of a downturn in 2023 – something which will accelerate demand for high-performance trucks, as a means to supporting change in industries such as logistics, healthcare, and food & beverage.

Construction demand

In similar fashion, the construction industry is exhibiting considerable growth, owing to the numerous projects under development. These infrastructure projects need trucks to drive on and off of construction sites – with the government notably investing in a number of road development projects that both necessitate this, and facilitate more rigorous use of trucks for further projects.

These projects include the famous 62 km highway connecting Dubai and Abu Dhabi. Meanwhile, other prominent projects like the Abu Dhabi Metro construction, Dubai Metro rail line construction, Emirates Roads Master Plan, Etihad railway Network, Airport expansion project, Abu Dhabi Airport expansion projects, and more, are likely to raise the demand for trucks in the UAE.

Technology

Transportation firms need to address a growing number of social and regulatory concerns, too. As the UAE’s economy looks to become more sustainable, this means that automotive customers increasingly expect their trucks to perform more efficiently, with a smaller carbon footprint.

This is leading to a ‘replacement wave’, whereby older, less fuel-efficient vehicles are phased out for more sustainable, cost-efficient models, in need of less maintenance.

At the same time, this trend is also being buoyed by a growing wealth of technological advances in new trucks. The biggest such trend is demand for vehicle telematics – which allow fleet managers to keep track of vehicles and check the exact positioning of the truck, and detailed information like truck speed, load, and all tachograph data.

While travelling long distances, fuel consumption can be a significant concern, however telematics makes it easy to follow up on fuel consumption and facilitates savings. Trucks equipped with such advanced features have the potential to majorly improve supply chain control – and therefore are in growing demand for logistics firms in particular.

Further reading: Auto insurance industry and InsurTechs can learn from telematics in Italy.

Regulations

In Dubai in particular, legal requirements are also driving new revenues for the trucking sector. For example, Dubai’s Roads and Transport Authority (RTA) has introduced a new regulation that actually requires all heavy vehicles to install telematics – with the aim of curbing accidents of heavy vehicles, as well as to encourage safe driving habits, strengthen the country’s infrastructure, and minimise the financial, human and environmental impacts caused by heavy trucks.

According to Glasgow Research & Consulting, this regulatory footprint is seeing uptake for trucks with such technology boom. For instance, now, municipality trucks in waste management have telematics system for smooth waste collection and management. With the help of advanced IoT-based devices, waste bins are attached with sensors – allowing for a highly integrated system monitoring, managing, and transporting refuse, drivers and vehicles.

Exports

The UAE’s truck market is not only prospering due to domestic demand, either. As one of the largest and most developed economies in the MENA region, the UAE is seeing its exports of trucks – both new and second-hand – increase, mainly to other markets in the Middle East and North Africa.

According to the study by Glasgow Research & Consulting, the leading players in the UAE’s truck market are Volvo, Daimler, MAN, PACCAR, General Motors, Ford, Nissan and Scania.