Advertising & Marketing

The Booming Automotive Industry in the UAE

Carmudi’s report on ‘The Booming Automotive Industry in Emerging Markets’ provides a detailed look into the global state of automotive sales and how car purchasing behaviors have changed due to the drastic increase in internet and mobile penetration, rising GDP, and the emergence of a middle class. The findings in this report are the result of Carmudi’s quantitative surveys conducted online with both car buyers and car dealers, and in-depth interviews with industry influencers throughout the UAE.

The State of Global Car Sales

According to IHS, global automotive sales for 2015 are expected to reach close to 89M units, a 2.4% growth from 2014. Emerging markets’ share of global sales will rise from 50% in 2012 to 60% by 2020, while their share of global profits is also set to rise by 10%. When it comes to new cars, purchase intent is strongest in Asia, where 65% of respondents say they will buy new cars in the next two years, compared with 7% who plan to buy used cars.

Growth of Auto E-Commerce

Globally, auto E-Commerce has grown at such a staggering rate that now as many as 80% of new car customers and almost 100% of used car customers begin their car shopping experience online. With internet and mobile penetration significantly growing in emerging markets, the rate of moving the car shopping experience online is beginning to mirror that of Western Markets. In the UAE, which has a gigantic annual trade surplus and high income per capita, 65.5% car buyers report using the Internet to conduct research on a car before making a purchase.

Changes in the UAE Car Sales

In the UAE, new vehicle sales growth reached 16.7% in 2013 according to the BMI. BMI remains upbeat on the prospects for new car sales across 2015 that will reach the 425,000 mark or a 5.1% growth. 

The Shift to Online

Car dealers in the UAE are are flocking to the internet to reach potential consumers. Our study found that 91% of car dealers surveyed report using the internet to advertise to customers. 91% of car dealer survey participants are also somewhat actively advertising their car listings on the Carmudi platform. 27.3% of dealers are actively using social media to reach customers. Even with the shift to online, car dealers in the UAE are still seen as comfortable with advertising listings through newspaper classifieds with over 27% reporting that they were somewhat focusing on newspapers.

The Future of Car Sales in the UAE

“UAE market is a very attractive place, which can lead to even higher limits of sales. The factors like liberal economic environments and high level of competition can offer good deals to customers. Also, finance offers from banks can be good instruments for higher sales. I think only good quality and commitment to customers can be the major factor which will affect future car sales,” according to Used Cars Manager Ramzi Anis Yehia, Liberty Automobiles Company.

“The rise of e-commerce and the growing movement online is changing the game for the UAE car market, bringing in the new generation of consumers to help drive future sales,” said Mohamed Noweir, Managing Director of Carmudi UAE.

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