The automotive industry in the UAE and GCC has been a resilient cornerstone of the economies in these countries for many years, so much so that the GCC has long been the largest automotive market in the MENA region. Although the sector seemed to show signs of slowing-down in 2016, the industry is expected to return to its commanding position due to a couple of factors.
Across the GCC, 2017 is the final calendar year before the implementation of VAT is carried out across the region beginning in 2018. As such, 2017 is expected to be a boom-year for car sales across the region, as individuals and companies rush to purchase pre-VAT priced vehicles.
No doubt, the sales of vehicles will contribute to the current estimate of 16.5 million vehicles on the roads across the GCC for 2017. This figure is estimated to rise to 19 million vehicles by 2020 according to a report by Frost & Sullivan, which also suggests that Saudi Arabia will be the regional market leader with a 52.5% market share. The same report suggests the UAE will have the second largest market share at 18.5% followed by Kuwait, Oman, and Qatar.
However, amidst all the trends affecting the automotive industry, there are two that directly affect the way in which automotive businesses operate. These are increasing maturity within the markets, and competition.