DUBAI — The addition of 4.3 million vehicles, or 4.67 percent growth per year to the existing fleet of 92 million active vehicles in the Middle East and Africa (MEA) in 2017, is going to help the region’s automotive aftermarket trade grow at 7 percent per year to $31 billion in 2022, up from $22 billion in 2017, according to a latest report by analysts TechSci Research, released in April 2018.

The total vehicle fleet size across the Middle East and African region was 92 million in 2017, while three million new cars were estimated to be sold in the Middle East last year, and a further 1.3 million in Africa.

The report by TechSci Research said a slackening of regional vehicle sales hasn’t ebbed the flow of demand for the automotive service industry and aftermarket products, with growth largely fuelled by demand from the existing vehicles in operation and the expected improvement of car sales moving forward.

“While the growth in sale of new cars might have slowed down, the maintenance, repair and overhaul of those vehicles in operation will continue to drive the demand of auto spare parts and accessories, before many of them come up for replacement due to continuous erosion, wear and tear,” Asad Badami, Managing Director of Al Muqarram Auto Parts (A-MAP) Trading LLC, said.

“With 3 million vehicles joining the existing active fleet of 92 million vehicles every year, we see a solid continuous growth in auto spare parts and accessories market.”

The automotive aftermarket is the secondary market of the automotive industry, concerned with the manufacturing, remanufacturing, distribution, retailing, and installation of all vehicle parts, chemicals, equipment, and accessories, after the sale of the automobile by the original equipment manufacturer (OEM) to the consumer. The parts, accessories, etc. for sale may or may not be manufactured by the OEM.

Sales of tires, oils, lubricants, coolants, filters, batteries, brakes, electrical parts, lights, and other accessories and car components was worth $12 billion in 2017, with this set to increase to $16 billion by 2022, the report said.

In Africa, the auto aftermarket was worth $10 billion last year, with demand for parts and accessories tipped to reach $15 billion by 2022.

Auto spare parts trade through Jebel Ali Port reached $10.75 billion in 2017, according to a latest report by Jebel Ali Free Zone Authority (Jafza), operator of the Middle East’s largest free zone. This also reflects that Dubai represents the biggest automotive aftermarket trade in the MEA region.

With $10.75 billion worth of auto spare parts trade in 2017, Jebel Ali Free Zone alone represents more than 48.86 percent of the US$22 billion auto spare parts and accessories trade concluded in the MEA region.

“In addition to the above factors, automotive aftermarket traders in the UAE also cater to the wider Middle East Africa and Central Asian markets – where demand continues to outpace the development of infrastructure, thus putting pressure on the roads,” Badami said.

“We represent the largest automotive aftermarket trade community in the world due to the sheer magnitude of the trade volume that makes Dubai as the largest hub of auto spare parts and accessories. As a major source market for those countries, auto spare parts and accessories traders will continue to serve those growth markets.”

“Therefore, we see a continuous growth of products and services in the auto spare parts trade and maintenance, repair and overhauling automobiles in the region.”

Tires accounted for the lion’s share of sales in both regions according to TechSci, comprising 22 percent ($2.6 billion) of the aftermarket in the Middle East in 2017, and 23 percent ($2.3 billion) in Africa.

This was followed by engine oils, lubricants, and coolants, which comprised a seven percent share of sales last year in the Middle East ($840 million), and six percent in Africa ($600 million).

The global automotive aftermarket market has seen a potential development over previous years, with total value of the trade reaching $193.18 billion in 2017 and is expected to grow to $302.66 billion in 2023, will grow at a CAGR of 7.77 percent.

The Middle East’s sales revenue from engine and car components, systems, tyres, and auto accessories, is expected to surpass the $15-billion mark in the next three years, compared to $12.4 billion in 2017, growing at a compound annual growth rate (CAGR) of 4.9 per cent, according to TechSci Research company.

The annual three-day event is the Middle East’s leading international exhibition for the auto service industry and aftermarket, and will feature more than 1,900 exhibitors from 55 countries in its 16th edition. — SG