Middle East: Gulf Countries on the move

Despite challenges, analysts envision a promising future for the region’s automotive industry. Electrification currently represents 1 to 2% of the fleet in key markets like Saudi Arabia and the United Arab Emirates (UAE). Both governments aim to achieve a substantial penetration of Battery Electric Vehicles (BEVs), targeting 40 to 75% of new car sales by 2035. Analysts predict a significant annual doubling of electric vehicles on GCC roads between 2023 and 2030.

This shift towards electrification is expected to boost the aftersales and premium parts market in the GCC. According to Frost & Sullivan’s presentation at Automechanika Dubai 2023, revenue from aftermarket (parts and labour) for light vehicles is anticipated to rise from $9.7 billion to $12 billion by 2027. While this figure is far from the $105 billion generated by parts trading in Europe in 2022, it underscores the growing importance of the GCC market for Western equipment manufacturers, especially as they face challenges in other regions like Africa. 
* GCC: Saudi Arabia, United Arab Emirates, Oman, Kuwait, Bahrain, and Qatar.