UAE Used Car Market to Witness 10.9% CAGR until 2028
Published | 16 May 2022
The UAE used car market is poised to grow two-fold by 2028, attributed to the growing preference of consumers for vehicle ownership, rising disposable income, and the surge in the number of the market players providing quality and affordable used cars…
A study recently conducted by the strategic consulting and market research firm, BlueWeave Consulting, revealed that the UAE used car market reached USD 20.60 billion in 2021 and is projected to reach USD 43.13 billion by 2028 at a CAGR of 10.9% during 2022-2028 (forecast period). UAE used car market growth can be attributed to the emergence of online and authorization platforms for used cars sale and purchase. Due to their affordable prices, used cars are gaining immense popularity in the UAE market. As an additional benefit, online used car platforms provide easy access to crucial information such as the price of a wide range of used cars, price comparisons from different vendors, mileage, appearance, and condition through pictures and visuals, etc. These factors go a long way in helping consumers make a final decision. However, the increasing price of used cars in the UAE due to the unavailability of new vehicles may act as a significant restraint for the growth of the market.
Improving Quality of Used Cars and Emerging Testing and Inspection Services is Expected to Boost the UAE Used Car Market
The condition and appearance of the used cars play a crucial role in determining their demand and price. With regular servicing and maintenance for less fuel consumption and better life, the first-hand car owners try to maintain top-tier quality of the cars. Thus, the car owners can retain the quality of the cars during resale, contributing to a smooth resale of used cars in the UAE Furthermore, the emerging testing and inspection services in UAE for used cars to make it safe for the rerun are also boosting its market growth.
The Growing Demand for Japanese Used Cars in the UAE is Driving the Market Growth
The demand for used Japanese cars is increasing at a high rate in the UAE, with Toyota being the most popular brand in the UAE used car market. Nissan also covers a substantial share of the market. Japanese used cars in the UAE are expected to increase due to favorable entry price points compared to their German or South Korean counterparts. Moreover, Japanese cars are also relatively affordable as far as service and maintenance are concerned, making them desirable for second-hand buyers.
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C2C Segment is Expected to Grow at a 12.5% CAGR During the Forecast Period
The customer-to-customer or C2C sale in UAE has become much easier due to rise of the social media and the internet. Dubbizzle is the most popular website for selling and buying used cars from private owners. It was first launched as a Dubai-focused website but now covers all the seven emirates. Other similar websites include UAEclass, Kargal and Open Sooq. Used cars for private sale can also be found on expat forum websites such as ExpatWoman, Expat Forum, and ExpatExchange.
Moreover, a lot of people post about cars they are selling on their personal Facebook pages as well as in groups for buying and selling of used cars. Facebook’s search function enables the buyer to easily find these groups. In terms of classifieds, previously, the ex-pats used to buy a newspaper, like Gulf News or Khaleej Times, for classified car sale advertisements. However, nowadays, the classified advertisements have also moved online. For instance- Khaleej Times now runs its classified ads for used cars through its Buzz On website.
Impact Of COVID-19 On the UAE Used Car market
The sudden outbreak of the COVID-19 pandemic significantly proliferated the UAE used car market, unlike the expectations. The use of public transport and private cabs declined because of the safety concerns during the virus spread, which resulted in a sharp surge in demand for used cars to fulfill their transportation needs. Affected by the COVID-19 situation, manufacturing and distribution difficulties negatively affected the new car market, causing a dramatic increase in used car demand. Several online platforms have appeared to facilitate the sale and purchase of used cars, leading to the growth of the market. Many auto manufacturing companies were forced to halt the production of new automobiles, resulting in a surge in used car sales in the market due to a scarcity of new cars from auto plants.
Competitive Landscape
The leading players in the UAE used car market include Al Tayer Group, Al-Naboodah, Al-Futtaim group, SellAnyCar.com, Elite Cars, Carswitch, Dubizzle.com, Arabian Automobiles, Yalla Motors and others prominent players. In particular, Al Fatta, Al-Naboodah, and Al Tayer held the largest share in 2021 owing to their continually expanding portfolio that includes some of the world's most recognized and respected automobile brands through addressing their customers' holistic B2C and B2B needs.
February 2022: Cars24 is a renowned online platform that has recently launched an AI-enabled software in U.AE. that allows vehicle enthusiasts to purchase and sell cars within 30 minutes of downloading the program. Customers can also calculate their monthly EMI and track other characteristics like as engine, steering, and tires. It is one of the most advanced platforms for consumers to obtain car financing, insurance, maintenance, and other important services.
November, 2021: SellAnyCar.com, based in Dubai, has announced a USD 122 million regional expansion strategy with Carnab.com. According to Founder Saygin Yalcin, the continuous success of the online car buying and selling service, which began selling to consumers two years ago, would put another nail in the coffin of traditional automobile merchants.
The in-depth analysis of the report provides information about growth potential, upcoming trends, and statistics of the UAE used car market. It also highlights the factors driving forecasts of total market size. The report promises to provide recent technology trends of the UAE used car market and industry insights to help decision-makers make sound strategic decisions. Furthermore, the report also analyses the growth drivers, challenges, and competitive dynamics of the market.
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