Automotive Industry at full Throttle as Dubai enters a New Growth Phase
Dubai has successfully positioned itself as an international automotive hub. This is evident in the spectacular growth of the automotive sector in recent times notwithstanding the Covid-19 pandemic which has disrupted the global economy in more ways than one. Ideal location, increasing domestic demand for high-end cars and a robust logistics sector have turned the emirate into a major exporter and re-exporter of vehicles, observe industry analysts.
Dubai’s unique geographic position between the East and the West is offering numerous benefits to automotive companies around the world, opines Dubai Industrial City managing director Saud Abu Al-Shawareb. The surge in shipping costs is forcing businesses to find the most direct and cost-effective routes to markets. “That is why Dubai has become a vital link in the global trade network and a gateway to the region,” Al-Shawareb reasoned.
With the UAE staging a strong recovery following Covid-induced global slowdown, Dubai’s value of export and re-export has surged 21.8% year-on-year, reaching Dh.147.3 billion in January-August 2021, according to Dubai Chamber of Commerce and Industry. Sheikh Mohammed bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE and Ruler of Dubai, interestingly, had set a five-year-plan to boost Dubai’s foreign trade from Dh.1.4 trillion to Dh.2 trillion.
Dubai’s automotive sector counts heavily in achieving the five-year-plan and hence it is no surprise Dubai Chamber is closely working with its partners both in the public and private sector to translate the dream of H.E. Sheikh Mohammed bin Rashid Al Maktoum into reality. “Our representative offices around the world play a key role in identifying export opportunities for Dubai Chamber members and the wider business community in Dubai,” noted Dubai Chamber CEO and President Humad Buamim.
Automotive players look at Dubai for other reasons too; ease of doing business and the readily available industrial space besides Dubai Industrial City’s contiguity to Jebel Ali Port and Al Maktoum International Airport through which two-thirds of the world’s population can be reached in just about 8 hours. Recent infrastructure upgrades also give direct access to heavy-tow trucks with direct access to the causeways linking the UAE with Oman and Saudi Arabia.
Dubai’s growing significance as the world’s leading automotive hub gained further strength when DP World recently acquired the US-based specialists in global automotive and supply chains - Syncreon - for an enterprise value of $ 1.2 billion. The move further strengthens DP World’s end-to-end logistics. “The acquisition will add significant expertise in the wider supply chain and excellent relationship with cargo owners,” said group chairman and CEO, DP World Sultan Ahmed Bin Sulayem.
The Gulf region is home to over 2 million vehicles, light, medium and heavy commercial vehicles included. Experts say the growing vehicle population is upping the demand of spare parts whose market is growing annually at 8.4%. The after-sales market is also predicted to reach about $ 18 billion by 2023. Sultan Ahmed Bin Sulayem bets on Dubai’s strength because companies now seek shorter supply chains and diversified routes. That also explains why Dubai is the undisputed global automotive hub.
Disclaimer: This article is a part of featured content series on Business in Dubai