MARKET REVIEW
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BOUNCE BACK? In the second of a series of articles, T&FME and Glasgow Consulting Group’s Vishal Pandey looks the state of play in the UAE passenger car market
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fter a number of subdued years, the UAE’s passenger car market is set for a healthy rebound, according to a new strategic market study by Glasgow Consulting Group. Owing to slowdown in consumer buying, a shift from ownership to usership and a maturing second-hand car market, the sale of new passenger cars in the UAE dropped from a high in 2015 (408,000 cars) to 153,000 last year, although 2020’s drop was exacerbated by the economic impact of the Covid-19 induced downturn. At first glance, Glasgow Consulting Group’s Vishal Pandey paints a gloomy picture when looking at the reasons for this fall. 26 MARCH 2022
“Since 2015 the sales have been low consistently. The trends of stagnant sales are due to economic uncertainty, overstock of supply by dealers, and an overstock of pre-owned vehicles. The industry faces entirely new challenges due to the COVID-19 pandemic from supply chain disruptions, reduced consumer spending power, and little or no sales.” According to Pandey, this drop represented a 17.8% CAGR decline over the five year, however the signs of recovery are so strong that the firm has adjusted its forecasts looking ahead. Previously it had predicted that the car sales would reach 391,100 cars by 2024 and now it believes that it could be just shy of 2015’s figures with 403,000 cars shifted in the market: “The market is predicted to return to
The rise in car sharing and mobility solutions is likely to drive the demand for more cars in the UAE”
growth this year and in the coming years,” he says. “By 2024, total new car sales is expected to be (roughly) at the same level as in 2015, on the back of three main drivers: an improving economy emerging out of the Covid-19 crisis, a continued high dependence on personal cars for commuting, and an accelerated shift to electric vehicles and luxury cars.” Digging further into the data he suggests that 2022 will see the UAE market enter a full recovery with sales passing 300,000 cars by the end of the year. “Owing to a high dependence on personal cars for commutation in UAE, the demand for passenger cars is not likely to be muted for long,” he says, although it does come with a notable caveat: “The shift from ownership to meconstructionnews.com
