United Arab Emirates (UAE) used cars market is dominated by Japanese manufacturers though American brands like Ford and German brands like BMW & Mercedes too take a sizeable share of the customer pie. Japanese vehicles are hot commodities in the used cars export market because of the reliability and quality of the vehicles. Dubai has the highest market share of used vehicles in sales volume followed by Sharjah and Abu Dhabi.
UAE Used Cars Transaction Value is expected to Grow at CAGR of 10% from 2017-2022. When it comes to the pre-owned car sales volume, Crossover ranked the top followed by luxury SUV, full size sedan and premium sedans. SUVs are one of the most common types of cars that are sold in the market. Dubai is a flourishing international trading hub in used passenger cars. There are even exclusive zones in Dubai for the transaction of used cars mostly to Africa, Central Asia and Europe where left-hand drive cars are in use.
The market of used cars in UAE has been growing steadily over the last few years. There has been a marked increase in the volume and average price of the pre-owned cars and reduction in average car ownership period. Though the oil price drop has slowed the demand for new cars in general, used cars market continues to thrive because of the availability of high quality used cars and the large number of expatriates in the country.
Though there is no standardized pricing in the used cars market, the passion for cars in this country brings in more dealers into this niche. Certified used cars are gaining foothold in the market as they provide reliable quality of cars.
Africa is the hottest used car market for UAE exports
Majority of pre-owned cars are exported to African nations. The automotive industry in Africa is relatively at a nascent stage compared to many other countries in the world. The huge demand for cost effective and good quality used cars in Africa is all set to rise in the due to increasing industrial prospects, better infrastructure, and lenient export policies, which is thought to boost the automotive industry in Africa .
The market for used cars in Africa is poised for a healthy growth as Africa is the least motorized region in the world with only 44 registered vehicles per 1,000 inhabitants as against the world average of 180 vehicles per 1,000 inhabitants.
African auto market thus has a huge growth potential. Demand for used cars is going up in Africa due to the emergence of the middle class with a higher level of disposable income. Nigeria is the biggest market for used cars in Africa where the sale of used cars are 4 times more than that of new cars.
Apart from South Africa and North Africa, the rest of the continent is also expected to have a great demand for second-hand cars in the coming years. It is estimated that by 2030 car ownership will more than double to reach a healthy number of 90 million registered vehicles
Why countries in the African continent import used cars
Many countries in Africa are underdeveloped and people do not have enough money to afford a new vehicle, which makes used car markets relevant. Africans prefer used vehicles to new vehicles due to reliability and better prices- at around 50% less than that of new ones.
Thousands of second-hand vehicles, particularly Japanese vehicles are shipped to Africa on daily basis. Even the duties on used vehicles are less than that of on new vehicles. People can choose from a wide variety of models and technology at reasonable prices at used car markets, which will ensure them a golden chance to own their dream vehicle even on a modest budget.
How it affects UAE GDP
Used cars markets in UAE
There are more than 400 dealerships in the market. Al-Futtaim, Al- Naboodah, Gargash motors and Elite cars are some of the reputed players in the market. Though B2B and B2C dealers hold the monopoly of sales, a small fraction of sales are also through sales via classified and C2C word of mouth channel. Used car market players are becoming more customer-centric by offering reliable vehicles at practical prices, which will make used car exports to grow at a higher rate like never before.
The used-cars industry outpaced the market for new cars, because consumers get superior quality, fairly new cars at incredibly low rates, which help them save big without having to compromise their dreams of owning their favorite model of cars.