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The emirate is a leading hub for the auto parts trade

The emirate is a leading hub for the auto parts trade



Modest rise in UAE auto parts trade

July 2015

Dubai generated trade worth Dh44.37 billion ($12 billion) in 2014 with Japan as the top source of imports, followed by South Korea and Japan.


The emirate, which has a brisk export and re-export trade, counted Saudi Arabia, Iraq and Afghanistan as the top three destinations of auto parts.


The total trade figure of $12 billion was a 10 per cent increase over 2013, according to figures released by Dubai Customs.


Imports were valued at $7 billion and exports and re-exports $4.9 billion.


“Dubai Customs has further enhanced the automotive spare parts trade through an array of first-rate customs facilitations and services provided to traders in this sector, enabling them to cater for market needs without delay,” said Ahmed Mahboob Musabih, director of Dubai Customs. The official added that streamlined and speedy clearance procedures were among elements that helped boost trade.


“Serving a pivotal role in automotive spare parts trade, Dubai acts as liaison between Asian, European and North American manufacturing countries and the consuming markets in the region,” Musabih observed.


According to Dubai Customs, Japan (Dh6.14 billion), South Korea (Dh3.57 billion), China (Dh3.31 billion), Germany (Dh3.16 billion), and the US (Dh3.11 billion) were Dubai’s top country partners last year in terms of total auto parts trade.


Meanwhile, Saudi Arabia (Dh2.37 billion), Iraq (Dh1.08 billion), and Afghanistan (Dh800 million) were the Emirate’s biggest export and re-export markets in 2014, accounting for a combined 23 per cent of Dubai’s exports and re-exports of auto parts, accessories, tyres, and engine components for the year.


Three major trading partners claimed a 49 per cent share of Dubai’s total automotive parts imports. Japan was the top source from which Dubai’s car parts originated, claiming a Dh6.12 billion share of the market. South Korea followed with Dh3.55 billion and China was third with Dh3.23 billion.


The figures were announced to an audience of auto parts manufacturers, suppliers, fleet operators, and regulators at the Automechanika Academy’s Commercial Vehicles Conference, which took place on the side-lines of Automechanika Dubai 2015, the Middle East and Africa’s largest automotive aftermarket trade show, featuring 1,889 exhibitors from 59 countries at the Dubai International Convention and Exhibition Centre. The conference put a spotlight on the surge of demand for commercial vehicles in the GCC, fuelled by increased government expenditure on infrastructure, growing economies, and robust crude oil exports.

 

F & S ESTIMATES


According to global analysts Frost & Sullivan, 115,171 trucks and buses were sold in the GCC region in 2014, bringing the total number of commercial vehicles (CVs) on the region’s roads to 1.2 million.


The 1.84 million light, medium and heavy commercial vehicles expected to be operational in the GCC by 2020 have in turn created a big demand for the CV spare parts market, which was valued at $3.38 billion in 2014 is and likely to reach $5.49 billion by 2020, growing 8.4 per cent annually.


Subhash Joshi, regional head for Automotive & Transportation, Mena, at Frost & Sullivan, said: “The crude oil price is the most important factor controlling growth of the economy in the GCC, and good economic growth drives government investments, resulting in higher commercial vehicle sales.”


Joshi added that increasing populations and rising per capital incomes also drove higher consumption of goods with the GCC economy highly dependent on imports.


“Any growth in consumption patterns will lead to more transportation and logistics activities, resulting in higher demand for trucks and buses,” he said.


According to Frost & Sullivan, Saudi Arabia and the UAE dominate the Gulf region’s CV auto components market, accounting for a combined 84 per cent regional market share in 2014.


Saudi Arabia’s CV spare parts demand was valued at $2.05 billion in 2014, and projected to be worth $3.65 billion by 2020, while the UAE’s $800 million market in 2014 is expected to reach $1 billion  by 2020.


Maintenance (filters, spark plugs, belts, brakes and linings) and mechanical parts (pumps, alternator, thermostat, starters and absorbers) account for 72 per cent of the market, while there’s also high demand for collision parts in the UAE, Saudi, and Kuwait.




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