Automotive Market in Dubai, UAE - Essay Example

Automotive Market in Dubai, UAE College: Automotive sector for the past years has been expanding at a steady rate and becoming more and more standardized. With increased level of competition, manufacturing companies have shifted from developed countries to developing countries with low cost of production. A country like the United Arab Emirates (UAE) has housed many auto giant developing countries. The country contributes to a third of the growth in automotive production in Asia. UAE has the highest consumption markets within the Gulf Cooperation Council (GCC).

Gulf Cooperation Council consists of UAE, Saudi Arabia, Oman, Qatar, Kuwait and Bahrain. Due to the availability of car parts accessories, Out of 4million passenger vehicles in the GCC, UAE has 1.4million in 2008; Total imports in automotive sector in UAE totaled 16.9 billion. In distribution of trade the country had 68% vehicles and 24% auto spares imports in the same year. UAE market mainly constitutes over 20% of the GCC total production. The major suppliers in the country are Toyota, Nissan, Honda, Mercedes, BMW and ford.

In 2008 the automotive sector recorded sales of 128,000 Toyota units however in 2009; Nissan showed an increased performance with 74,000 units sold. The table below shows the automotive sales in UAE market. (Unit: AED, million)2005200620072008 Vans and buses4,82.40897.921,425.442,819.56 Cars11,713.4414,436.6422,145.8026,891.67 Trucks522.561365.281365.284096.3UAE total12,718.416,699.8424,396.5233,807.53As seen from the table, passenger car segment recorded the highest car sales in UAE and contributed more than 70% of the total vehicles sold from 2005 to 2008.

Toyota is the leading market brand in UAE, followed by Nissan. On the commercial industry, Daimler a Germany company is the highest ranking automotive firm. AFMC Company which sells BMW, MINI and Alphina vehicle brands leads in automotive sales at 20%. The increased sales from year to year are due to the open and highly competitive market. With no official data exists on the overall automotive sales sector, analyst expect sales of cars in UAE to rise up to 20% from 2008. The number of family vehicles in Dubai has increased by 50% over the past two years.

This is attributed due to the increase in residents as well as increase in entry of new automotive companies. As from 2006 licensed drivers in the country increased by 16% from 581,179 to 676,660 in 2009. Most of the automotive customers in UAE own vehicles through leasing as it is difficult for them to secure loans, with most them leasing luxury cars over other different cars like trucks. Due to the increasing technology in Engineering and infrastructure, UAE has recorded the lowest number of accidents in the Gulf region (Jacobs G 2000).

With increased level of completion in the country, UAE will continue to be the leading automotive sales market in the region.BibliographyA Sector Study on Automotive Sector in UAE with Regional Perspective Investment Opportunities in Automotive Sector in RAK http://www.abs.gov.au. 29 April 2014Dow Jones database of companies, available from Dow Jones journalLukas 2007 Changing Features of the Automobile Industry in Asia - Asia-Pacific Research and Training Network on Trade Working Paper Series, vol. 5, no. 2, pp. 468-493.Trade Statistics, 2011.

Dubai Port & Customs, Dubai WorldJacobs G, Thomas A, Astrop A. 2000. Estimating Global Road Fatalities Transport Research Laboratory,