By Andy Sambidge
New report says automobile sector set for healthy growth through to 2014
The UAE automotive market is predicted to grow by around eight percent annually over the next four years, a study published Tuesday by Dubai Chamber of Commerce & Industry revealed.
But fewer sales may be seen in the luxury market, traditionally a popular choice in the UAE, as customers put more emphasis on energy efficiency and value for money, the report added.
It said car sales in the country, which were badly hit during the global slump, would see a compound annual growth rate (CAGR) of eight percent to 2014, while total re-exports are expected to increase at a CAGR of five percent in the same period.
The Chamber study said this increase in auto sales would be accompanied by a rise in car ownership as a percentage of the population, up to a high of about 57 percent by 2014.
The report said demand for both luxury and volume cars "will remain strong in the UAE despite the development of world-class public transport infrastructure".
The study, based on a recent Business Monitor International report, important drivers of growth for the automotive market would include the development of energy efficient and low-cost vehicles.
"Energy efficient vehicles emitting low amounts of carbon emission are...likely to be an important trend and growth driver in the future," the report added.
"While the demand for luxury cars is on the rise, so is the need for low cost vehicles required by budget consumers. In the future we could see cheaper vehicles with newer brand names gain market share in the UAE," it said.
Regarding challenges facing the UAE auto industry, the study said that streamlined regulations for auto-financing were likely to lead to more new car purchases.