UAE Used Car Market Outlook to 2028

Market Overview:

The UAE Used Car Market has undergone significant changes since the 1990s, driven by a diversifying economy and an increasing expat community. With the demand for affordable transportation on the rise, the market has transitioned from traditional offline channels to a landscape that includes both organized and unorganized sectors. The market is segmented based on factors such as market structure, car types, and regional influences.

Notably, major players like Al Futtaim lead in a moderately fragmented market. Future projections indicate steady growth, influenced by improvements in the new car market and sustained demand for mid-level cars. This research report aims to offer valuable insights for industry stakeholders, investors, and enthusiasts navigating the dynamic and evolving UAE Used Car Market.

In the ecosystem of the UAE Used Car Industry, major players like Al Futtaim, AWR-Arabian Automobile, Al Habtoor, Al Nabooda Auto Mobile, and Al Ghandi Auto Group shape a moderately fragmented market. Al Futtaim leads among OEM players with a significant share. The industry, evolving since the 1990s, reflects a shift from traditional channels to a blend of organized and unorganized sectors. Segmentation considers market structure, car types, and regional influences. The competitive landscape is dominated by a few OEM players, contributing to 40% of total market sales. Future growth is expected to be steady, driven by improvements in the new car market and sustained demand for mid-level cars. This report aims to provide insights for stakeholders, investors, and enthusiasts navigating this dynamic marketplace.

UAE Used Car Market Analysis

• UAE used car market evolved in the 1990s and early 2000s with a diversifying economy and growing expat community.
• Initial transactions were offline through C2C channels and local dealerships, due to limited digital literacy.
• Recent developments include the entry of unorganized dealers and online platforms like Yalla Motors and Car Switch.
• Semiconductor chip shortage in new cars has increased demand for used cars.
• OEM certified dealerships offering attractive financing options boost consumer confidence, especially for eco-friendly vehicles.
• Improved online infrastructure is shifting the market towards online auto-classifieds.
• Anticipation of solutions to the semiconductor chip shortage signals market maturity and adaptability in the UAE's used car industry.

Key Trends by Market Segment:

By Market Structure: In 2023, the UAE Used Car Market is segmented based on market structure. The Organized sector, comprising OEMs, Multi-Brand Outlets, and Online Marketplaces, holds a significant share due to the increasing influence of online platforms and value-added services offered by organized stores. In contrast, the Unorganized sector, which includes C2C transactions, local dealers, auction houses, and other sources, commands a larger market share. This dominance is fueled by a robust auction market and the widespread presence of local dealers in various unorganized marketplaces like Al Aweer, Al Quoz, and Souq Al Haraj, reflecting the diverse dynamics of the UAE's used car market.

By Car Type: In 2023, the UAE Used Car Market is distinctly segmented by the type of car, measured in units sold. SUVs stand out as a popular choice, particularly among families, given their spacious and comfortable features, making them ideal for long drives and vacations. The increasing population is contributing to a growing demand for SUVs. Simultaneously, the influx of expats for job opportunities is fueling demand for sedans and hatchbacks. These vehicle types are favored by individuals for daily commuting to and from work or office. This dual trend reflects the diverse preferences within the market, with families opting for SUVs for recreational purposes and single individuals gravitating towards sedans and hatchbacks for practical commuting needs.

By Region: In 2023, the UAE Used Car Market is segmented by region. Dubai leads with the highest share, driven by its large population, frequent influx of tourists, and thriving business hub. Sharjah is witnessing growth in demand, focusing on improving business infrastructure. However, smaller-population emirates like Fujairah and Ras Al-Khaimah currently experience lower demand for used cars. Regional differences highlight the impact of demographics and economic factors on the market dynamics.

Competitive Landscape:

Major Players in UAE Used Car Market

• The UAE Used Car Market is moderately fragmented.
• Key players include Al Futtaim, AWR-Arabian Automobile, Al Habtoor, Al Nabooda Auto Mobile, and the Al Ghandi Auto Group.
• The market features a moderate level of fragmentation, with a presence of OEM-certified and brand-authorized dealerships.
• Al Futtaim leads the market among OEM players, commanding approximately 12% of the share.
• The top 5 OEM players collectively contribute to around 40% of the total market sales.
• Other market drivers include the strategic presence of OEM-certified dealerships, emphasis on brand authority, and the reliability associated with major players, influencing consumer preferences and market trends.

Future Outlook:

• UAE used car market to witness growth slowdown in 2023 due to improved conditions in the new car market related to semiconductor shortages.
• Reduced waiting periods for new cars shift consumer preference, but strong demand in the used car market persists, especially for mid-level cars.
• Factors driving demand include affordability, availability, the necessity for mobility, and a substantial expat population.
• Future market growth expected to maintain a steady rate of approximately 6%.
• Improved new car market conditions will result in more vehicles entering the used car segment, supporting continued growth in the UAE used car market.