UAE has a bustling automobile industry that has evolved with time and today offers some thrilling business prospects and opportunities. Dubai is one of the biggest re-exporters of cars and automobiles in the Middle East. Domestic demand for cars in Dubai has grown on the back of a strong automotive retail sector growth posited at 6.5% p. a(2015) . UAE accounts for 39.8% of the total exports of brand new cars.
There are some interesting insights available from data available on the export of cars from UAE to Africa. The dissection of this data reveals patterns that are consistent with international trade theories based on monopolistic competition, product group homogeneity, tastes and preferences. There is also compelling evidence that suggests the opportunities and challenges that new car exporters from UAE to Africa are faced with. From a business perspective it is worthwhile to take a look at some of these insights on Africa consumerism and car exports from UAE to Africa.
Geographical and Economic Profile of African Auto Imports
Africa, the second largest continent in the world in terms of size and population is the home to 15% of the global population. It is well served by the Suez Canal which is one of the most important maritime trade routes in the world.
The African economy that consists of 54 nation states is characterized by labor intensive techniques of production and a strong bottom of the pyramid market that likes to focus on economy aspect of automobiles. Among the top rated tastes and preferences of African consumers for cars are a love for Japanese car brands, leaning towards cars with high economy engines and mileage and a high demand for sedans, hatchbacks, wagons and vans that are used for both passenger commutation and small to light cargo shipment.
The market for exported cars in Africa is wide open with low end mass priced cars at the bottom of the market and high end premium luxury cars making it to the top of the pyramid. Some of the top selling brands of cars in Africa include Toyota and Nissan followed by Mitsubishi, Mazda, Daihatsu and last but not the least Honda.
A large proportion of the current trade of car exports indicate a dominance of used cars. Africa is the largest importer of used cars in the world and hold great relevance to automobile makers. Africa has served the interests of the automobile makers well during the times of the recession in the year 2008. As economic growth in African nations like Kenya, Congo, South Africa, Egypt and Morocco picks up there shall be a clear picture on the prospects of growth of exports of new cars to Africa.
It is worthwhile to note that UAE is one of the most strategically important nations in the export of new cars to Africa owing to it being well connected to Africa by maritime and aerial trade routes. The trade policy of UAE has two barriers both of them being non-tariff based which do not pose any challenge to exports of new cars to Africa from UAE. Auto makers like Toyota, Nissan and Mitsubishi already have a good presence in the automobile retail market in UAE and Tesla Motors has announced ambitious plans for its electric vehicle range in the Middle East and plans to commence production operations in UAE. Planitium is a leading brand new car exporter in Dubai, UAE. We deals with brand new SUV 4×4 cars, sedan cars, trucks, pickups and buses to African countries.
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February 12, 2018