THE UAE automotive aftermarket is expected to reach a market size of AED 33 billion (US$9 billion) by 2025. Will UAE continue to foster automotive aftermarket service market: Ken Research

ByVijay Kumar

1. Shift towards private transportation owing to the pandemic has led to increase in private vehicles in UAE

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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 related news, a recent study 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.

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.

2. 2020 Dubai Expo in 2021 “Connecting Minds, Creating the Future”

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  • The Expo took place from Oct 1, 2021–March 31, 2022.
  • It accelerated the UAE’s recovery in H2 with an additional boost for travel and tourism.
  • Visitor activities increased the demand for transportation, which indirectly created more demand for the aftermarket services.
  • There resulted an increase in the usage of taxi and cabs also.
  • In the year 2020 the Chairman of the Board of Executive Directors of the Roads and Transport Authority (RTA) revealed that total number of electric/hybrid taxis account for around 4683 vehicles. Out of 4683 taxis the number of hybrid taxis were 4510, which is about 50% of the Dubai taxi fleet.

3. Normalization between Israel and UAE are expected to accelerate UAE Aftermarket Services Industry

Normalization between Israel and UAE can potentially have a positive impact on the UAE’s Automotive Aftermarket Services Industry. This is because with the opening up of diplomatic and economic ties between the two countries, there may be an increase in trade and business opportunities, which could result in an increase in demand for automotive aftermarket services.

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With more cross-border trade and investment, there may be an increase in the number of vehicles being imported into the UAE from Israel, and vice versa. This could lead to an increase in demand for automotive aftermarket services such as repair and maintenance, parts and accessories, and other related services.

Moreover, with the potential increase in tourism and business travel between the two countries, there may also be an increase in the number of rental cars and fleet vehicles on the road, which could also drive demand for automotive aftermarket services.