Report Overview

The increasing level of disposable income, growing economic strength, the rising shift in consumer preferences, and growing diversification of offerings in the market are expected to drive the UAE Luxury Car Market during the forecast period between 2024 and 2030.

UAE Luxury Car Market – Industry Trends & Forecast Report, 2030

UAE Luxury Car Market size by value was estimated at USD 4.12 billion in 2023. During the forecast period between 2024 and 2030, the UAE Luxury Car Market size is projected to grow at a CAGR of 6.01% reaching a value of USD 7.98 billion by 2030. A prominent driver of the market is the increasing popularity of luxury cars, seen as status symbols and known for their comfort and superior driving experience. Select brands offer VIP benefits through assistance and rewards programs. The demand for used luxury cars is rising due to affordability compared to new cars. The UAE's developed economy has led to a growing number of high-net-worth individuals, contributing to the expanding market.

By volume, the UAE Luxury Car Market size was estimated at 0.059 million units in 2023. During the forecast period between 2024 and 2030, the UAE Luxury Car Market size is projected to grow at a CAGR of 7.13% reaching the volume of 0.15 million units by 2030. Diverse luxury car showrooms, notably in Dubai and Abu Dhabi, allow consumers to explore and compare models and prices simultaneously, with accessibility facilitated through online platforms. The well-maintained road infrastructure and stringent vehicle inspection regulations enhance the reliability and safety of luxury cars. Rising disposable income fuels demand, aligning with the perceived desire for status, luxury, and superior amenities. Various financing options make luxury car purchases more convenient for consumers.

Luxury Car Market – Overview

Luxury car leasing encompasses the segment within the automotive industry that specializes in offering upscale, premium, and luxury vehicles for lease or rental to both individuals and businesses in the Middle East and Africa. This market primarily features high-end cars and SUVs from well-established brands, providing customers with the flexibility to enjoy and drive these vehicles without the extended obligation of ownership.

UAE Luxury Car Market

Growth Drivers

High Disposable Income

High disposable income is a driving force behind the thriving UAE Luxury Car Market, witnessing a remarkable 10% surge in new car sales in 2022, exceeding 400,000 units. This growth is attributed to the nation's expanding population and increasing incomes. While major players like Toyota, Nissan, and Hyundai dominate, the market experiences a surge in luxury brands like BMW, Mercedes-Benz, and Rolls-Royce. The elevated disposable income fosters an increased demand for luxury cars, reflecting aspirations for status, opulence, and superior amenities. This financial capacity empowers individuals to cover upfront, maintenance, and insurance costs, further facilitated by diverse financing options. The UAE's affluence, stemming from vast oil reserves and a progressive vision, positions it as a hub for luxury car enthusiasts and manufacturers.

Expansion into Niche Segments

The super Luxury Car Market in the UAE represents a niche segment characterized by vehicles exceeding USD 250,000. This exclusive market caters to the elite, with a concentration of Ultra High Net Worth Individuals (UHNWI) in the region. The demand for these high-end luxury cars is further fueled by favorable economic conditions, including a resilient GDP, growing at 3.2% in 2022. The market's allure lies in its exclusivity, with limited editions and special examples available in Dubai and Abu Dhabi showrooms, attracting enthusiasts seeking unparalleled automotive experiences.

Challenges

Limited Public Transportation

Limited public transportation in the UAE significantly impacts the Luxury Car Market growth. The country's reliance on alternative transportation options like taxis and ride-hailing services, in addition to the limited availability of comprehensive public transportation, hinders the widespread adoption of luxury cars. Unlike some global counterparts with extensive public transit systems, the UAE Luxury Car Market faces challenges due to the absence of a robust public transportation network. In a region where convenience and efficiency are crucial, the reliance on taxis and ride-hailing services might be preferred over owning a luxury car. Additionally, the cost-effectiveness of these alternatives contributes to the restraint on the Luxury Car Market. Commuters often find these options more economical and environmentally sustainable, diverting potential luxury car customers away from ownership. The limitations in public transportation options not only affect the daily commuting choices but also impact the overall lifestyle preferences, influencing the Luxury Car Market landscape in the UAE.

Impact of Geopolitical Tensions on UAE Luxury Car Market

UAE Luxury Car Market is navigating the complex terrain of geopolitical tensions, notably influenced by the Russia-Ukraine conflict. This conflict has become a catalyst, steering the dynamics of luxury car trade, particularly between the UAE and Russia. DubiCars' insightful data underscores the magnitude of this impact, revealing a staggering 200% surge in leads from Russia and an unprecedented 800% increase in web traffic on the ExportSafe page. The roots of this transformative shift lie in the repercussions of the Russia-Ukraine conflict on the Russian car industry. Sanctions imposed by 45 countries, including the withdrawal of major international car manufacturers such as Ford, General Motors, Mercedes-Benz, Audi, Renault, Toyota, and Nissan, resulted in a substantial decline in domestic car production. This void in the Russian market, particularly for premium vehicles, has led to an upswing in the demand for luxury car imports from the UAE. DubiCars' data further delves into the specifics, depicting a remarkable 830.6% average monthly increase in viewership from Russia and a 215% surge in daily leads, emphasizing the UAE's pivotal role as a key source for premium vehicle acquisitions amidst the challenging geopolitical landscape.

UAE Luxury Car Market

Segmental Coverage

UAE Luxury Car Market – By Vehicle Type

By vehicle type, the UAE Luxury Car Market is divided Hatchback, Sedan, SUV/MPV, and Sports Car segments. The sedan segment holds the highest share in the UAE Luxury Car Market by vehicle type. The prevalence of sedans in the UAE Luxury Car Market can be attributed to their inherent elegance, spacious interiors, and association with status and prestige. Renowned for providing a comfortable and prestigious driving experience, luxury sedans offer advanced technological features, superior performance, and adaptive urban maneuverability. The diverse model options, ranging from compact to executive, cater to the varied preferences of consumers in bustling cities like Dubai and Abu Dhabi. The popularity of sedans reflects the consumer's desire for a seamless blend of style, comfort, and cutting-edge technology, establishing these vehicles as symbols of both affluence and driving sophistication in the region.

UAE Luxury Car Market – By Propulsion Type

Based on propulsion type, the UAE Luxury Car Market is split into ICE and Electric segment. The internal combustion engine segment holds a higher share in the UAE Luxury Car Market by propulsion type. In the UAE, the cost-effectiveness of traditional fuels, in contrast to alternative options, contributes to the elevated sales of Internal Combustion Engine (ICE) luxury cars, overshadowing the demand for electric and hybrid models.

UAE Luxury Car Market – By Category

Based on category, the UAE Luxury Car Market is divided into Entry Level, Mid-Range, and Premium-Range segments.

Competitive Landscape

Major players operating in UAE Luxury Car Market include Rolls-Royce Motor Cars Limited, BMW AG, Koenigsegg Automotive AB, Automobili Lamborghini S.p.A., W Motors, Daimler AG, Volkswagen AG, Aston Martin Lagonda Limited, Ferrari S.p.A., Automobiles Ettore Bugatti, Volvo Car Corporation, and INFINITI. To further enhance their market share, these companies employ various strategies, including mergers and acquisitions, partnerships, joint ventures, license agreements, and new product launches.

Recent Developments

• In September 2023 - Dubai Police incorporated 100 Audi RS e-tron GTs, fully electric with a 488-kilometer range, into their luxury patrol car fleet.

• In February 2023 - AW Rostamani Group launched NXT Luxury, its first luxury used-car showroom in Dubai.

Scope of the Report

By Vehicle Type

• Hatchback

• Sedan

• SUV/MPV

• Sports Car

By Propulsion Type

• ICE

• Electric

By Category

• Entry Level

• Mid-Range

• Premium-Range