UAE automotive trade takes a drive uphill

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The UAE automotive trade experienced a growth spurt of a $ 1.9 billion from 2009 to 2010 (a 19.7 % rise). Additionally, for both the years, the imports of all car types increased by 31.3%.

The figures were drawn by a recent study prepared by researcher, Yousef Ziab, for Analysis and Trade Information Department of the Ministry of Foreign Trade.

The compound annual growth rate (CAGR) for car sales in the UAE is predicted to grow by around 8% annually over the next four years as, while total re-exports are expected to increase at a CAGR of 5% in the same period.

Global Trade Standing

The Global Enabling Trade Report of 2010 has ranked the UAE in the 16th position for auto imports and exports, ahead of Chile, United Kingdom and U.S.A. This was an improvement of two positions in comparison to the previous year. In international comparison, the clearance of goods has become more fluid (12th position) and the country has ranked at the 4th place, for its availability and quality of transport infrastructure.

In terms of efficiency of import and export procedures, the UAE ranked 9th on a global scale, and it has proven to have a high level of physical security (4th position).

Auto Sales


Over 500 companies comprise the ?automotive sector in Dubai?s Jebel Ali Free Zone, or Jafza including those specializing in car products like tyres & tubes, workshop equipment, batteries, parts & systems, repair & maintenance and accessories.

The car sales within the country in 2010 increased by 10% to $42.4 billion? from $38.5 billion in 2009. This has been attributed to the country?s population growth and the rising living standards, as well as the GDP per capita, the study stated, citing a recent report by Business Monitor International.



The catastrophes Japan suffered over 2011 has led to its domestic sales of new cars, trucks and buses dropping by 37.0% . This also disrupted domestic production for all automakers and cut off vehicle supplies to dealers, according to the Japan Automobile Dealers Association. Shortages for parts occurred for domestic and some overseas car makers as the massive quake and tsunami hit auto assembly and parts manufacturing plants in northeastern Japan. The country?s core private-sector machinery dropped by 3.3% in April. Toyota was hit the hardest with a 46% drop in sales. Nissan sales fell by 38%, while Honda saw its figures slashed by more than a quarter at 28%.


The China Association of Automobile Manufacturers (CAAM) stated that sales in China rose 6.5% to 1.35 million units in March, recovering from the lowest growth rate in two years in February.

South Korea

Output by South Korea’s five automakers in May rose 10.5 percent from a year earlier. In South Korea, according to Kia Motors Corp., the company sold 565,355 vehicles in the first quarter of 2011, up 20.2% from the same period last year. The second-largest automaker, set a new quarterly sales record in the first three months of the year amid growing overseas demand for its vehicles.?Sangyong Motor Co., ?smallest automaker in South Korea revealed that its sales surged nearly 47% on-year in April on strong exports.

In France, car sales fell 11.2 % in April ?and a further fall of 12.6% in June. The German automaker, Daimler?s sales dropped 25% year on year in November 2010.

Trade Figures


The percentage of the UAE’s exports and re-exports that went to Iran was 22.6% (a growth of 15.2% since 2009) and 12.1% went to Iraq (a fall of 5.9% since the previous year). These two countries led this section of trade out of the 10 countries to which 69.8% went to. The countries on the list of the UAE’s largest trading partners grew over last year. They include China (in 4th place with a growth of 220%), Kazakhsthan (in 6th place, a growth of 168%), Russia (in 8th place, and a growth of 220%) and Nigeria (in 9th place, with a growth of 92%).

The UAE?s exports and re-exports of small passenger cars to to Libya by 36% and to Saudi Arabia dropped by 41% . In 2010 the ?exports of motor vehicle with more than 9 grew by 32.4% to $181.7 million up from $137.2 million in 2009. Iraq took the largest share of 19.9%, followed by Iran (11.2%), Ethiopia and Nigeria (10.2% each).

Largest trading partners

China and Oman were recorded as the UAE?s largest trading partners in 2010 with exports to the two destinations growing by 993% and 620% respectively.


Needless to say, the Japan earthquake in March of 2011 has affected the car trade industry across the globe. Car franchise holders in the UAE started to take precautions and cut re-exports to regional markets, as supply disruptions hit the market due to the disaster.

Japanese auto spare parts manufacturers were also affected by the disrupted. Prior to the catastrophe, UAE imports of luxury and small passenger cars grew by 41% because of the population growth and Japan?s exports to the UAE grew by 47% in 2010.


UAE?s imports from Mexico, Taiwan and South Korea surged by 450%, 443% and 104% , respectively in 2010. For motor vehicles with more than 9 seats, the country?s imports fell by $611 million in 2009 to $312 million in 2010, down 49%. On the other hand, ?imports of luxury and small passenger cars increased by 41% . Japan held the maximum share with 38.2%, followed by the Netherlands with 14.1% and Turkey 11.4%.

The rankings emphasize on the UAE’s potential as a trading hub and international companies can benefit from the country’s high quality transport infrastructure. Taking this into consideration they would be encouraged to make it a base for expanding their operations into the Middle East and North Africa (MENA).

Sources: Dubai Chronicle, Ministry of Foreign Trade, Emirates 24/7, Expatica


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