Automotive industry

Auto industry in full swing as Dubai enters new phase of growth

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Dubai has successfully positioned itself as an international automotive hub. This is evident in the spectacular growth of the automotive sector in recent times despite the Covid-19 pandemic which has disrupted the global economy in more ways than one. The ideal location, growing domestic demand for premium cars and a robust logistics sector have made the emirate a major exporter and re-exporter of vehicles, industry analysts observe.

Dubai’s unique geographical position between East and West offers many advantages to automotive companies around the world, says Dubai Industrial City Managing Director Saud Abu Al-Shawareb. Soaring shipping costs are forcing businesses to find the most direct and cost-effective routes to market. “This is why Dubai has become a vital link in the global trade network and a gateway to the region,” Al-Shawareb explained.

As the UAE experiences a strong recovery from the Covid-induced global downturn, the value of Dubai’s exports and re-exports jumped 21.8% year-on-year, reaching 147.3 billion dirhams in January-August 2021 , according to the Dubai Chamber of Commerce and Industry. Sheikh Mohammed bin Rashid Al Maktoum, Vice President and Prime Minister of the United Arab Emirates and Ruler of Dubai, has, interestingly, laid out a five-year plan to boost Dubai’s foreign trade from 1.4 trillion dirhams to 2 trillion dirhams. dirhams.

Dubai’s automotive sector is very important in achieving the five-year plan and it is therefore not surprising that the Dubai Chamber is working closely with its partners in the public and private sectors to make the dream of HE Sheikh Mohammed bin Rashid Al Maktoum a reality. . “Our representative offices around the world play a key role in identifying export opportunities for members of the Dubai Chamber and the wider business community in Dubai,” said the CEO and Chairman of the Dubai House, Humad Buamim.

Automotive players are eyeing Dubai for other reasons as well; the ease of doing business and the industrial space readily available in addition to the contiguity of the industrial city of Dubai with the port of Jebel Ali and the international airport of Al Maktoum through which two thirds of the world’s population can be achieved in just 8 hours. Recent infrastructure upgrades also give direct access to heavy tow trucks with direct access to causeways linking the UAE with Oman and Saudi Arabia.

Dubai’s growing importance as the world’s premier automotive hub was further reinforced when DP World recently acquired US automotive and global supply chain specialists – Syncreon – for an enterprise value of 1. $2 billion. This move further strengthens DP World’s end-to-end logistics. “The acquisition will add significant expertise in the wider supply chain and excellent relationships with freight owners,” said Group Chairman and CEO, DP World Sultan Ahmed Bin Sulayem.

The Gulf region is home to over 2 million vehicles, including light, medium and heavy duty vehicles. Experts say that the growing population of vehicles increases the demand for spare parts whose market is growing by 8.4% annually. The aftermarket is also expected to reach around $18 billion by 2023. Sultan Ahmed Bin Sulayem is betting on Dubai’s strength as companies now seek shorter supply chains and diversified routes. This also explains why Dubai is the undisputed global automotive hub.

Disclaimer: This article is part of a featured content series on business in Dubai