The Oman Automotive
Market is anticipated to register a robust CAGR in the upcoming years due to
increasing investment in Oman. It is one of the most promising and rapidly
growing vehicle markets, backed by several reasons including manpower
availability, R&D activities, location advantage, and government support.
With a favorable economic outlook and increased spending power, the country's
automotive sales are expected to skyrocket. New companies continue to enter the
market, particularly in the low-cost car category, with sales expanding
rapidly. Passenger cars and light commercial vehicles are also experiencing a
surge in demand.
Introduction
The automobile sector is
crucial to a country's socioeconomic success. The growth of any country's
automobile sector is commonly used to measure its progress. The position of
motor transport in the national economy's infrastructure determines the
country's growth forces, the development of the modern economy, and the
possibilities for its development. Oman has one of the fastest-growing
automotive markets in the Middle East The rising and increasing vehicle sector
is one of the significant advancements taking place in the Sultanate of Oman's
business environment. Oman has effectively established itself as a global
automotive hub. The Oman automotive market consists of vehicles used for
personal or public purposes.
Market Drivers
Oman's automobile market
is growing along with economic revitalization. The country's GDP recorded an
upward trend, boosting the automobile industry. The auto industry is also
getting a boost from its OEMs. The OEMs are planning to expand their
activities, production bases, and after-sales services in the country. The
government also supports the automobile sector as it is a revenue generator for
the country. The government has been working on attracting foreign market
players to set up their manufacturing plants within the country. The government
is also investing in making new roads and highways, which is increasing the
demand for vehicles on roads. Furthermore, the government is offering tax incentives
to market players, which will increase the involvement of foreign players and,
in turn, increase the Oman automotive market. Due to Oman's geographical
location, the automotive industry has a positive impact on market growth. Oman
has seven commercial ports. Additionally, Oman is located near India, USA,
Europe, and China, which leads to a reduction in lead-time and access to raw
materials for production and high intensity of import and export, effectively
increasing the automobile industry in Oman. Oman's unique regional bilateral
ties offer great potential, and with its unrestricted distribution network
throughout the Middle East and North, it is ideal for pan-GCC sales not only in
terms of selling new vehicles but also auto parts and accessories.
Market Challenges
The challenges faced by
the Oman automotive industry include the shortage of raw material supply in the
country. Due to the coronavirus outbreak, the supply chain of key automobile
components has been disrupted. Additionally, the hampering of import activity
has severely impacted the automobile industry. As Oman is an import-driven
automobile market, it leads to high vehicle costs, restricting many consumers
from buying expensive cars. This barrier can restrict the growth of the auto industry.
Furthermore, there is a shortage of skilled labor in the manufacturing sector,
which is a limiting factor for the Oman automotive industry. The electric
vehicle infrastructure is one of the stumbling blocks in the Oman automotive
market. Moreover, the shortage of chips impacts the production of automobiles
and auto parts. Additionally, there is a lack of dealerships within the
country, which has led to the limited availability of vehicles.
Market Scope
Recent Developments
·
In February 2023, Audi Oman announced that
Sayatri has become the leasing and rental company to add electric vehicles to
its vehicle portfolio. Zubair's Group Leasing and Rental company has leased the
Audi e-Tron to Kempinski Muscat Hotel.
·
In 2023, Shell Oman signed a Memorandum of
Understanding (MOU) with the Oman Automobile Association (OAA). This
partnership will offer an Electric vehicle charging hub and smart service
station.
·
In 2023, MHD Acere launched the JETOUR new
automotive brand in the country. MHD Acere also launched the Chelsea Truck
Company in 2022.
·
In 2022, the Oman Investment Authority and the
National Transport Company of Qatar formed a joint venture to produce buses.
These buses are manufactured by Karwa Automotive company. These buses were used
in the 2022 World Cup in Qatar.
·
In November 2022, Audi partnered with Evo for
the development of Electric vehicle charging stations. They installed more than
50 chargers across Oman in 2022 and plan to install over 200 chargers in 2023.
·
In February 2022, May Motors launched the first
electric car, MayiE1, in Oman. The company also announced that around 100
orders have been booked, and production of electric cars will start in 2023.
·
In November 2021, the Karwa Automobile factory
produced the first bus in its manufacturing plant in Duqm. The Karwa Automotive
Project aims to bring manufacturing to the country. The project's total
investment is USD 71 million.
Market opportunities
The Oman Automotive
Industry provides opportunities for the automotive sector to engage with new
technology and manufacture new parts and components for automobiles.
Additionally, the introduction of electric vehicles and their manufacturing
within the country has prompted many OEMs to transition to electric mobility.
With the development of infrastructure for electric vehicle charging stations,
it paves the way for greater integration of electric vehicles within the
country, which in turn contributes to overall vehicle growth. The government
has also launched programs to reduce carbon emissions. As a result, the
government has decided to implement 7,000 electric vehicles in the first phase
of the carbon neutrality plan. Furthermore, with increased penetration of
electric vehicles, it will serve as a steppingstone for hydrogen-based vehicles.
Market Segmentation
The Oman Automotive Market is
segmented by vehicle type, by propulsion type, by transmission type, by region,
and competitive landscape. Based on the vehicle type the market is segmented
into Two wheeler, Passenger cars and Commercial Vehicles. Based on propulsion type,
the market is segmented into Internal Combustion Engine (ICE) and Electric. Based
on the transmission the market is segmented into Manual and Automatic.
Company Profiles
Toyota Motor Corporation, Nissan Motor Co. Ltd., Hyundai Motor Company,
Tata Motors Ltd., Volkswagen AG, Hino Trucks, MAN Truck & Bus, AB Volvo,
Mitsubishi Motor Corporation and MG Motor UK Ltd. are the key players developing
advanced technologies to stay competitive in the market and enhancing their
product portfolio in the regions to increase their customer outreach.