JEDDAH - The GCC countries boast of one of the highest per capita incomes in the world. The stable economy, a high population growth rate, and the fact that local production of automobiles is almost non-existent, are the key factors behind the significant development of the automotive sector.
The diversified automotive industry in the GCC and UAE is highly dependent on imports from Europe, America, Japan, and other Asian countries.
“The large presence of automobiles in the region creates significant demand for the aftermarket industry and augurs well for Automechanika Middle East, the leading international trade fair for the automotive industry in the wider Middle East,” said Elisabeth Brehl, managing director of Epoc Messe Frankfurt, organizers of the trade fair.
Research stated by Auto Strategies International, show that 66 percent of the total number of passenger cars in UAE are from Japan, while the European, Korean and American car brands stand at 14.71 percent, 7.55 percent and 3.63 percent respectively.
The findings were upheld by the Qatar-based Gulf Organization for Industrial Consulting (GOIC) in its report on automotive industry in the Gulf.
There is strong demand for cars in the GCC with about 969,000 vehicles imported into the region last year, presenting car companies with a prime opportunity, said Paran Panicker, a consultant with GOIC.
“If you want to go away from the oil-based economy, automotive is an area to look at,” he said.
He said that Saudi Arabia and the UAE could be the most lucrative markets, as they took 36 percent and 28 percent of the region’s total car imports respectively.
“Longer term, some will put plants there, that is for sure. After 2010, people will start looking at it.”
Car sales in the Emirates have slowed since the end of last year as banks adopted stricter criteria for car loan approvals, which included higher salary requirements, interest rates and downpayment minimums.
However, an industry official ruled out the possibility of setting up assembly plants for cars in the region.
Frank Bernthaler, regional director of sales and marketing for Mercedes-Benz, said import duties in the UAE, for example, were among the lowest in the world at 5 percent, and there were no suppliers or stable workforce for an assembly plant. “Whatever angle you look at it in the current structure, it doesn’t make sense,” he said.
Egypt and Iran were the region’s biggest carmakers because of their higher import tariffs, he added.
Automechanika Middle East will be held on May 31-June 2, 2009 at the Dubai International Convention and Exhibition Centre.
“Reported research show that the Japanese automobiles dominate the GCC auto market with 60.98 percent, while the rest of the pie was shared by Korean brands at 13.78 percent, American brands at 10.15 percent, and European brands at 8.20 percent,” said Michael Dehn, Senior Show Manager of the Automechanika Middle East.
“With almost four million passenger cars in the GCC, out of which 1,287,442 are in UAE; this region offers car parts and accessories distributors, retailers and the aftermarket industry, in general, a huge opportunity to enter a market least affected by the current credit crunch,” Dehn added.
Automechanika Middle East is the largest auto aftermarket exhibition in the Middle East, and the only exhibition incorporating the four major segments i.e., parts and systems, accessories and tuning, repair and maintenance, and it and management. The exhibition will also feature a new sector for tires and batteries in 2009.
In 2008, Automechanika Middle East featured over 950 exhibitors from 44 countries to a visitor attendance of more than 17,500 from 127 countries. The trade fair covers full range of parts for motor vehicles, as well as components for the drive, chassis, body, electrics and electronic groups, equipment for vehicle service and repair, bodywork repair and painting, tires, batteries, and performance systems.
Automechanika Middle East is the perfect platform to meet new contacts, discuss new trends and technological developments, keep up to date with industry knowledge, and source new products and solutions from world over.