Dubai: The market share gains Chinese auto brands are having in the UAE will significantly impact how prices are being set for 2025 model year launches and beyond.
This influence will play out not just in new car prices of Chinese brands but for other manufacturers, with the exception of those in the luxury car category and high-end SUVs. Even EV sales will feel the impact of Chinese brands forcing their way for greater visibility with UAE car buyers.
“Already, Chinese car brands have raised their share in the UAE from 8 per cent to 12 per cent,” said Michel Ayat, CEO of AW Rostamani Group, the Nissan, Infiniti and Renault dealership in Dubai and northern Emirates and which recently added Zeekr and Chery to its portfolio.
“We find that (a sizeable percentage among) UAE’s new generation of car buyers is not interested in the brand of the car they intend to buy. If they are assured of the quality and it comes at a price they are comfortable with, they buy.
“This is what’s happening with demand for Chinese cars in the UAE. And every other automotive brand in the UAE has to ensure their pricing stays competitive.”
The UAE now has over 20 Chinese auto brands, many of which were introduced to the market over the past two to three years.
Other dealership sources say they cannot afford to take their eyes off on what the Chinese competition is setting as prices on their new model year launches. “If we cannot get our pricing right, it can lead to a lost sale to a Chinese competitor,” said a source at a carmaker. “That’s a situation we can’t afford to have.”
What’s playing out in the UAE and other Gulf markets is not an isolated trend. The biggest car markets in the West either plan to raise import duties on Chinese EVs or have done so to help their domestic carmakers.
All the big car dealerships in the UAE now have a Chinese car brand or two in their portfolio. Along with their Chinese partners, they have also doled out hyper-aggressive promotions on car financing deals and on after-sales incentives.
Chinese owned brands such as Geely, Changan, Chery and MG are among the most visible on the local roads, holding their own against the best of the Japanese and Korean competition. (When it comes to EVs, Zeekr and BYD are the ones in the running.)
UAE new car sales look to close out 2024 with over 300,000 units sold. “I think we are going to have an extremely busy second-half and that’s why I forecast overall 2024 sales of close to 310,000 new vehicles against the 273,000 in 2023,” said Ayat.
If this forecast comes true, it would continue the super-charged growth UAE car market has had since September 2021. The lost year of 2020 – set off by the Covid crisis - is all but forgotten.
“This year, new car prices are stable or even coming down in real terms because every dealer and carmaker wants to be competitive,” said Ayat. “So, you have new residents settling in the UAE and a good number among them are preferring new cars rather than pre-owned.
“That’s why the split between new car and secondhand car sales in the UAE is back at 1:1 and not running at 1:2 or higher like in Europe or other big markets.
In the last couple of years, a surge in pre-owned vehicle sales in the UAE was driven largely by the shortage of new cars due to production and supply disruptions. Car buyers were compelled to turn to the pre-owned market, which only pushed demand and prices of secondhand cars higher.”
