Automotive aftermarket poised for growth in UAE despite subdued auto sales

Although vehicle sales in the UAE have seen a slowdown in 2017, the auto aftermarket sector is seeing a positive trend leading up to 2020. This is mainly due to the increasing number of vehicles, hot climates and tough road conditions which consequently affect the lifespan of batteries and tires.

Subdued auto sales must be seen in the light of the present demanding economic environment spurred by the increase in petrol prices, removal of subsidies and the appreciating value of the Japanese Yen. The industry is further challenged by higher costs of imports, stricter government regulations and a flourishing used-car market.

However, according to Investment Advisory firm Alpen Capital, although car sales have been under pressure in the last couple of years the number of passenger cars is expected to grow from an estimated 10.3 million in 2015 to 13.2m in 2020.

An optimistic Mr. Asad Badami, A-MAP Managing Director said “The forecast for the UAE auto market looks encouraging indeed. This is mainly due to the expanding consumer base, growing disposable incomes and affordable vehicle ownership. Add to that the attractive financing options and availability of low-cost fuel. This is bound to have a knock-on effect on the automotive aftermarket in the UAE and A-MAP can look forward to growing interest in tires, batteries, parts, components, repairs and maintenance.”

The Middle East spare parts market is estimated to grow six per cent annually to reach $17.27 billion by 2020 and the Gulf market for auto components is progressing towards significant growth over the next 3 years.

Vehicle customization is another area where the UAE is witnessing a growing trend. This is evident from the growing number of car accessory outlets springing up across the Emirates. Furthermore, there seems to be an increasing interest in social media as more and more automotive dealers are maintaining an online presence.

Another positive sign are the investments by the UAE, Saudi Arabia and Oman in incentives and vehicle manufacturing plants geared to establishing a regional auto manufacturing hub.

A-MAP plays a leading role in the auto spare parts market in the UAE. It represents top brands in auto spare parts, particularly the popular Solite and Asimco product range. It has the competitive edge due to its strategic direct distribution business approach. Additionally, the company’s prompt and professional customer service has been a key factor in its success.