UAE auto sales surge 19.7% in 2010, setting new record
The UAE automotive market expanded to $11.1 billion in 2010, with Japanese imports dominating but facing disruption after the March 2011 earthquake and tsunami.
UAE car sales climbed 19.7% in 2010, reaching a record $11.1 billion according to the Ministry of Foreign Trade. The figure, up from $9.2 billion in 2009, reflects strong demand in the Emirates even as other global markets struggled with the effects of the financial crisis.
Japanese manufacturers supplied nearly half of all imported vehicles in 2010, with Japan accounting for 46% of the UAE's car imports. Toyota, the region's most popular brand, played a key role in this dominance. However, the March 2011 earthquake and tsunami in Japan disrupted production and exports, sharply reducing supply to the Gulf. In May 2011, Toyota's exports to the UAE fell 63% compared to the previous year, as the company struggled with production cuts and power shortages in the aftermath of the disaster.
The Ministry's report suggested that Japan's share of UAE imports would likely decline in 2011 due to these supply constraints. Dealers and buyers in the Emirates faced longer waiting times for new Japanese models, and some shifted focus to alternative brands or re-exported vehicles to fill the gap.
Growth outlook and market trends
Despite the disruption, analysts expected the UAE car market to continue expanding, with forecasts of an 8% compound annual growth rate through 2014. The re-export segment, which sees vehicles brought into the UAE and then shipped to other markets, was also projected to grow, albeit at a slightly lower 5% CAGR over the same period.
Not all segments saw growth. Imports of vehicles with nine seats or more, such as minibuses and large vans, fell by 48.9% in value compared to the previous year. This drop may reflect changing demand patterns or a shift towards smaller vehicles in the commercial and private sectors.
Japanese supply issues reshape the market
With Japanese brands facing production setbacks, the UAE market opened opportunities for other exporters. Dealers reported increased interest in Korean, European and American models as supply constraints forced buyers to consider alternatives. The disruption also affected the re-export business, as vehicles sourced from Japan became less available for shipment to neighbouring countries.
The overall resilience of UAE auto sales in 2010 and early 2011 contrasted with trends in Europe and North America, where demand remained subdued. The Emirates' strong economic position, population growth and appetite for new vehicles continued to support the sector, even as global supply chains came under pressure.
For more on global auto sales trends, see US November Auto Sales Set for Record as Black Friday Drives Demand.
