The automobile industry plays a key role in the economy of the UAE. The industry has been growing steadily in the past year with its innovative approach spilling out to other sectors. In the past few years, the region has witnessed strong sales numbers but also the introduction of new technologies.
The view that the auto industry is crucial for the country’s economic performance isn’t just held by industry analysts and enthusiasts. In a recent visit to General Motors headquarters, the UAE Minister of Economy, Abdulla Bin Touq Al Marri, echoed the sentiment and expressed his view that the country “is a prominent regional hub in the manufacturing and trade off cars and their spare parts”, as reported by Gulf Today. The UAE Government has shown interest in strengthening the bond between the public and the private sector.
The auto industry in the UAE: the figures
There is plenty of data to back the strength of the sector. The market is the second biggest in the region, losing only to Saudi Arabia, according to research by Emirates NBD. The International Monetary Fund expects the UAE economy to grow by $10.8 million by next year and a lot of the growth is driven by the auto industry.
Furthermore, the auto market grew by 27% before 2020. Considering that the global market is stuck at around 1% growth, figures in the UAE are impressive. The UAE is among the fastest-growing automobile markets in the world and the strong growth is attracting a lot of interest from global industry players.
According to the figures, the UAE will have around 267 thousand cars by the end of 2020. The prediction became a close reality, even despite the coronavirus pandemic slowing industry growth across the globe.
In terms of popular cars, the UAE remains home to luxury cars and bigger vehicles. The region is home to larger families which means larger vehicles are popular. Furthermore, luxury vehicles have always been popular especially in terms of specialized vehicles. However, as income levels continue to increase in the region, more middle-income vehicles are also starting to make their way into the industry.
Innovation and new technologies
One important part of the strength of the automotive industry in the UAE is its ability to lead innovation. The reason people are paying attention to the sector is not just the growth in pure sales figures. It is also what the industry is producing and putting out. There have been a lot of innovative solutions and uses of transformative technologies, such as Artificial Intelligence.
The Dubai International Motor Show is among the best places to witness these innovative solutions and new technologies. The internationally popular show takes place every year with a lot of car manufacturers and suppliers heading to the city to see what is happening.
The motor show has highlighted the region’s deep investment in following the self-driving car industry, as well as coming up with more eco-friendly vehicles. The sentiment was highlighted during the Minister of Economy’s visit to General Motors. The company echoed the idea that the region needs to be at the forefront when it comes to creating smarter and safer vehicles.
Furthermore, the Government has put a lot of effort in recent years to respond to the changing industry in terms of regulation. For example, the Dubai Green Mobility initiative set up in 2015 is looking at ways to ensure growth in the car industry isn’t detrimental to the commitment of reducing emissions in the region.
What does it means for the consumer?
What does the strength of the industry mean for the consumer? After all, nearly 80% of the region’s car industry is focused on passenger vehicles for private use. The figures highlight the economic strength in the region, as well as peoples’ need to have vehicles to get around. The fact that there are a lot of options available for citizens is important and allows people to meet their vehicle needs.
Furthermore, the innovative approach within the sector is resulting in other new technologies that boost consumer options. For example, the strength of the industry has also created a boost in the available car insurance market. Finding the best car insurance in Dubai can result in a lot of innovative products, lowering insurance prices and ensuring the consumer finds the best possible product.
In short, consumers in the region are not able to enjoy just good vehicles but also other innovative products that keep prices low. With future advances in AI, there is a lot more room for new innovative solutions that can spill into other areas of life. For example, having a self-driving vehicle can help citizens balance work and private life better. When it comes to the auto industry in the UAE and its strength in terms of economic impact, the next decades will be interesting to witness.
