The Current Outlook for UAE's Automotive Industry

11 Apr 2022   |  UAE

The automotive industry in the UAE is one of the biggest drivers of the country’s economic growth. It is currently the second largest automotive market in the Gulf Cooperation Council (GCC), and the sector plays a key role in the economy as the country looks ahead.

Prioritizing the development of the automotive industry in the UAE shows how the government plans to utilize it to bolster the country’s economic growth. As Dubai enters a new growth phase, it is also expected to become the region’s main automotive hub, expanding through exports and re-exports of vehicles in the Middle East.

What is the current automotive industry outlook in the UAE, and what opportunities are available for businesses looking to enter the market?

The Recovery of the Automotive Industry in the UAE


The current car sales statistics in the UAE are indicative of the sector’s massive market. After dipping in 2020 during the COVID-19 pandemic, the automotive market has shown signs of recovery with promising sales across the board. Passenger car sales revenue is projected to reach $5.8 billion this year, after the demand came back to full throttle from August to September 2021. During that period, buyer interest even exceeded pre-COVID-19 numbers.

Dealerships and manufacturers found it difficult to keep up with the demand, and that will prove to be beneficial for the automotive market growth in the UAE this year as they try to address the backlog. Luxury car brands became highly desirable, with prospective buyers even paying premiums to ensure they get their units early.

Large SUVs enjoy the largest market share in the passenger vehicle segment. However, hybrid cars and even electric vehicles already have sure buyers in the UAE. New car sales are expected to increase by up to 30% in 2022, as more brands are introduced to the market and production and shipments get up to speed with consumer demands.

All Roads Lead to Dubai

With the UAE currently having the perfect engine for growth in the automotive industry, there are plenty of opportunities for both petroleum-powered and electric vehicles in the country. Global interest in Dubai as the main hub for automotive trade will only increase, and companies looking to set up shop in the city will find that the market for vehicles and components is large enough for everyone.

Dubai is also a strategic location for businesses in the automotive industry, with government support allowing it to connect with the biggest markets in the world. Dubai’s Industrial City is near both the Jebel Ali Port and Al Maktoum International Airport, and it has also enjoyed infrastructure updates for easy transit to and from the city.

Digitalization is also driving changes in the automotive industry in the UAE. Consumers, automotive suppliers, and industry players will become more connected than ever, and conducting business in the country will be more sustainable and accessible. The outlook for the automotive industry in the UAE remains rosy, and there is no reason to not take part in its growth.

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