Jafza boosts UAE’s auto market growth with $12.4b trade volume

Jebel Ali Free Zone (Jafza), part of the DP World Group, facilitated over 1.2 million metric tonnes (MT) from Dubai’s total volume of around 4.8 million MT of vehicle and transport commodities in 2021, equivalent to $12.4 billion, more than a third of the total trade worth $31.3 billion.

Jafza has been a significant contributor to the automotive industry’s progress in the country. Its logistics infrastructure and global trade network have ensured the steady rise of the automotive sector, connecting African, Asian and Middle Eastern traders to consumers across the world, it said.

With companies from 70 countries and a workforce of nearly 8,000, Jafza’s infrastructure and trade volumes are an attraction for industry giants such as Ford, General Motors, Honda, Hyundai, Nissan, Mitsubishi, Volkswagen and Volvo. The free zone connects traders with more than 260 airports via Al Maktoum International Airport and over 150 ports with direct services to Jebel Ali Port. 

Additionally, smart trading solutions and benefits such as 0 per cent VAT and corporate tax help businesses operate efficiently as international distribution centres.

Integrated automotive logistics

While the Jebel Ali Port is integral to automotive trade in general, it is a steady contributor to the export and import of used cars, reinforcing Dubai’s status as a major export hub for used cars in the UAE and the MENA region. Due to a consistent demand for used cars, according to a report by Ken Research, the UAE’s used car market is expected to reach Dh112 billion in revenue by 2025.

Jebel Ali Port’s state-of-the-art roll-on, roll-off (RoRo) terminal plays a pivotal role in this ongoing success. The port has RoRo berths which can handle up to 1 million car equivalent units (CEUs). It can also store up to 27,000 CEUs within its quay-side yards, including a multistorey facility, the largest in the region. Adjacent container stuffing and de-stuffing services are also significant advantages for partners.

Reinforcing international trade

While physical infrastructure has been the foundation of Jafza’s success, it has been supported by bespoke solutions provided by DP World Logistics to optimise supply chain operations for auto traders.

These include fourth-party logistics (4PL) activities, and track and trace technology to enable transparency and simplicity across logistics activities, trade financing, feedering and reverse logistics. Global automotive customers can leverage DP World’s global presence across 78 countries, including dedicated RoRo facilities in Cyprus, Romania, Germany and Dubai.

DP World’s acquisition of Syncreon in July 2021 also enables the company to deliver end-to-end solutions to cargo owners. Syncreon operates across high-growth automotive industries with services such as receipt of materials, warehousing, inventory management, kitting/sequencing for line feeding, and export packaging.

DP World’s European network comprises 12 inland terminals, strategically located in economic centres throughout Germany, Switzerland, Belgium and France. DP World also provides tri-modal connectivity between inland terminals in major European ports through 60 weekly barge services and over 100 rail connections.

Jafza accounts for 23.9 per cent of total FDI flow ‎into Dubai, sustaining the employment of more than 135,000 people in the UAE. In 2020, Jafza generated trade worth $104.2 billion.