New Transportation research report from Business Monitor International is now available from Fast Market Research
Boston, MA -- (SBWIRE) -- 05/24/2013 -- After an estimated 27% year-on-year (y-o-y) growth in new vehicle sales in UAE during 2012, we forecast the market to grow by an average of nearly 9% y-o-y during our five year forecast period to 2017. The most potent factors driving this growth will be favourable macroeconomic conditions and household spending, increased access to vehicle financing and the migration from the neighbouring states.
In the long term, the new vehicles segment will also receive some support from the growing regulations in the used cars segment, which are gaining popularity among budget-conscious consumers. From January 1 2013, the UAE government, in cooperation with the Emirates Authority for Standardisation and Metrology (Esma), introduced a technical examination mechanism for used vehicles imported to the country. The regulation itself is primarily aimed at ensuring that these vehicles meet international, GCC and Esma standards. However, we believe that tougher regulations could increase the cost of ownership of these vehicles.
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In the meantime, there is sufficient growth for carmakers to tap in the new vehicles segment. Japan's Toyota Motor maintained its dominance in the market with its local distributor Al-Futtaim Motors posting a record 32% y-o-y increase in vehicle sales during 2012. US-based Ford Motor registered an impressive 55% y-o-y rise in its sales in 2012, after 35% y-o-y growth in 2011. However, the major outperformer in the new vehicle market was Renault, whose locally-based dealer Arabian Automobiles registered a 67% increase in sales.
Opportunities are also forthcoming in the alternative fuel opportunities, mostly led by increased usage of these vehicles in government and public transport fleets. In February 2013, Dubai Municipality revealed plans to generate compressed natural gas from waste to power its commercial vehicles. For this, the municipality has teamed up with Emirates Gas (Emgas), a subsidiary of Emirates National Oil Company (Enoc), and is aiming to produce enough CNG to power 15,000 light commercial vehicles a day. BMI believes there will be enough demand for this fuel, as plans to convert fleets of public transport and government vehicles to CNG and other alternative fuel gather momentum.
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