UAE Used Car Market Heading for Boom Amid the Pandemic: Projected to Grow at a CAGR of 5.7% in the Forecast Period
Published | 06 September 2021
A recent study conducted by the strategic consulting and market research firm BlueWeave Consulting revealed that the UAE used car market was worth USD 12.6 billion in the year 2020. The market is estimated to grow at a CAGR of 5.7%, earning revenue of around USD 18.3 billion by the end of 2027. UAE used car market growth can be attributed to the emergence of online and authorization platforms for used cars sale and purchase. Due to their affordable prices, used cars are gaining immense popularity in the UAE market. As an additional benefit, online used car platforms provide easy access to crucial information such as the price of a wide range of used cars, price comparisons from different vendors, mileage, appearance, and condition through pictures and visuals, etc. These factors go a long way in helping consumers make a final decision. However, the increasing price of used cars in the United Arab Emirates due to the unavailability of new vehicles may act as a significant restraint for the growth of the UAE used car market.
Improving Quality of Used Cars and Emerging Testing and Inspection Services Is Expected to Boost the UAE Used Car Market
The condition and appearance of the used cars play a crucial role in determining their demand and price. With regular servicing and maintenance for less fuel consumption and better life, the first-hand car owners try to maintain top-tier quality of the cars. Thus, the car owners can retain the quality of the cars during resale, contributing to a smooth resale of used cars in the UAE. Furthermore, the emerging testing and inspection services in UAE for used cars to make it safe for the rerun are also boosting its market growth.
The Growing Demand for Japanese Used Cars in the UAE Is Driving the Market Growth
The demand for used Japanese cars is increasing at a high rate in the UAE, with Toyota being the most popular brand and leading the United Arab Emirates used car market. Nissan also covers a substantial share of the market with a 10% share. Japanese used cars in the UAE are expected to increase due to favorable entry price points compared to their German or South Korean counterparts. Moreover, Japanese cars are also relatively affordable as far as service and maintenance are concerned, making them desirable for second-hand buyers.
UAE Used Car Market - By Sales Channels
The UAE Used Car market is segmented into B2B/B2C dealers, classified, C2C, and word of mouth based on sales channels. The B2B/B2C segment accounts for the largest market share because of the emergence of various licensed used cars dealers and online platforms specifically designed to meet the requirements of the UAE market. The online platforms in B2B/B2C offer several crucial information such as prices, specifications, reviews, etc., which fuels the growth of the United Arab Emirates used cars market. On the other hand, the classified segment is also growing at an impressive rate. The increasing internet penetration is influencing the growth of this segment.
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UAE Used Car Market - Emirates Insights
Geographically, the UAE Used Car market is segmented into Dubai, Abu Dhabi, Sharjah, Umm Al Quwain, Ras Al Khaimah, Fujairah, and Ajman. Among these, Dubai accounts for the largest market share due to the availability of cheaper used cars compared to other regions. Additionally, the high number of migrant workers and increasing digital penetration also influence the growth of the used cars market in Dubai. Abu Dhabi accounts for the largest market share following Dubai as consumer preferences are rapidly shifting towards affordable vehicles.
Impact of COVID-19 on The UAE Used Car Market
The sudden outbreak of the COVID-19 pandemic significantly proliferated the UAE used car market, unlike the expectations. The use of public transport and private cabs declined because of the safety concerns during the virus spread, which resulted in a sharp surge in demand for used cars to fulfill their transportation needs. Affected by the COVID-19 situation, manufacturing and distribution difficulties negatively affected the new car market, causing a dramatic increase in used car demand. Several online platforms have appeared to facilitate the sale and purchase of used cars, leading to the growth of the market.
The leading market players in the United Arab Emirates used car market are SellAnyCar.com, Al-Futtaim group, Arabian Automobiles, Al-Naboodah, Elite Cars, Al Tayer Group, Carswitch, Dubizzle.com, Yalla Motors, Carmudi, and other prominent players.
The market is highly competitive and fragmented due to various online platforms for buying and selling. To gain an edge over the market, companies increasingly adopt competitive strategies like mergers, acquisitions, and partnerships.
The in-depth analysis of the report provides information about growth potential, upcoming trends, and statistics of the United Arab Emirates used car market. It also highlights the factors driving forecasts of total market size. The report promises to provide recent technology trends of the UAE used car market and industry insights to help decision-makers make sound strategic decisions. Furthermore, the report also analyses the growth drivers, challenges, and competitive dynamics of the market.
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