Forecast
Period
|
2024-2028
|
Market
Size (2022)
|
USD
412 Million
|
CAGR
(2023-2028)
|
2.12%
|
Fastest
Growing Segment
|
SUV/MPV
|
Largest
Market
|
Dubai
|
The UAE luxury car market
is expected to grow at an impressive rate during the forecast period. Generally, vehicles manufactured by premium
automakers such as Jaguar, BMW, and Mercedes-Benz are classified as luxury
vehicles, while some manufacturers offer premium models that fall into this
category. However, there are certain characteristics that almost all luxury
vehicles share. Generally, luxury cars feature high-quality components, such as
premium interiors and comfort features such as heated seats, as well as a
smooth, powerful engine tuned to deliver exceptional performance. Additionally,
some luxury vehicles feature handmade components, both on the interior and
under the hood, and are often equipped with premium technology features, such
as large-screen infotainment systems or high-quality audio systems. As a result
of these factors, luxury cars are more popular among the rice class people as
they prefer to buy luxury cars to maintain their social status in society.
UAE Luxury Car Market
Overview
The UAE luxury car
market is divided among the different segments in the report which is vehicle
type that consist of hatchback, sedan, and SUV/MPV cars. In this segment, sedans
accounted for the largest market share followed by the SUV/MPV cars.
Based on propulsion, UAE
luxury car market is split into ICE and electric. In UAE the price of the fuels
is cheap compared to the other alternative fuels due to which the sales of ICE
luxury cars are at a higher end compared to the electric & hybrid one. However,
The demand for the electric luxury cars is predicted to surge in the coming
years due to rising concern for environment. In addition, the battery range of
the electric luxury cars are higher which can go a long distance on a single
charge.
UAE Luxury Car Market Drivers
There
are several reasons due to which luxury cars are becoming more popular in the
UAE. Luxury cars show the status of a person, are more famous among the people
due to their comfortability and give the better experience over the other
normal cars. Also, certain brands offer assistance services with benefits
programs and rewards programs, this means that that person can get experience
of VIP benefits. In UAE people are also looking for used luxury cars as they
are more affordable than new cars due to the high price of new cars. Secondly, as
UAE is a developed economy, the number of high-net-worth individuals is rising
due to which the demand for luxury cars is also expanding. The wide variety of luxury
cars are also available in the luxury car showrooms, especially in Dubai and
Abu Dhabi. As a result, consumers explore and compare different models with
prices at the same time. Luxury cars can be bought through online marketplaces
or classifieds platforms. The UAE’s well maintained road infrastructure and
stringent vehicle inspection regulations make luxury cars more reliable and safer
to drive.
The increasing
disposable income of consumers has resulted in an increase in the demand for
luxury cars in the country. As disposable income increases, individuals have
the financial resources to invest in higher-end items, including luxury cars.
This is due to the perceived need for status, luxury, and superior amenities
that luxury cars provide. As discretionary income increases, individuals can
cover the higher up-front, maintenance, and insurance costs associated with
luxury vehicles. Furthermore, the various financing options available to
consumers make it easier for them to purchase luxury cars.
UAE Luxury Car Market
Challenges
Luxury vehicles
typically come with higher maintenance costs due to the presence of premium
engines that necessitate high maintenance, as well as more intricate
powertrains. Ownership costs for items such as oil changes are likely to be
higher due to the use of expensive oil, vehicle specific components among
others. Consequently, maintenance is an important factor to consider while determining
a luxury car's true cost. Additionally, luxury cars typically have more
powerful engines and transmissions, resulting in lower fuel efficiency than a
comparable small economy car's powertrain. Luxury vehicles are also typically
equipped with lower gear ratios, which can result in more gas usage per mile.
Many of the sought-after
luxury vehicles, including Jaguar and Bentley, are imported. Therefore, repair
cost is high resulting in high overall ownership cost of the vehicle. The
higher the value of a vehicle, the higher the monthly premiums will be.
Insurance companies base their premiums on a variety of factors, such as the
vehicle's value. If a luxury vehicle is very expensive, then it is likely that
the owner will have to pay more each month for the insurance.
UAE Luxury Car Market
Recent Development
BMW Group is one of the
leading companies in the UAE luxury car market due to its operational
excellence and strong supplier network in the UAE. Additionally, the Group has
been able to maintain its strategic direction and hasten the shift towards
sustainable mobility. The Group has set ambitious objectives for reducing CO2
emissions by 40% per vehicle by 2030, across the entire lifecycle. To achieve
this, the BMW Group has established a partnership with EGA (Emirates Global
Aluminum). The BMW Group has launched its latest vehicles, such as the BMW 7
Series, using EGA's CelestiAL aluminum, which is produced using solar energy
generated by the MOKTOUM Solar Park. To avoid a monolithic approach, the Group
has embraced technological openness, allowing customers to choose from multiple
drive train technologies based on their preferences and lifestyles.
UAE Luxury Car Market Technical
Advancements
Luxury car buyers in the
UAE are readily opting for electric and hybrid luxury models to meet their
needs. This shift is due to the growing awareness of sustainability and
environmental consciousness among consumers, as well as the increasing demand
for eco-friendly options backed by government incentives and tax exemptions.
This trend is further supported by the emergence of charging infrastructure,
which has enabled luxury car manufacturers to offer a range of electric and
hybrid models, combining luxury features with a more environmentally friendly
driving experience. This shift in consumer preferences is in line with the
UAE's ambition to become a sustainable and smart city and reflects the growing
desire of affluent consumers to combine luxury and environmental
responsibility.
Luxury cars are highly preferred
by consumers in the UAE due to their status and fame. Ownership of a luxury car
is seen as a symbol of wealth, success, and social status, which is deeply
rooted in the culture of the UAE. Furthermore, luxury cars are renowned for
their superior performance, cutting-edge technology, and opulent interiors,
which meet the consumer's need for comfort and ease. The well-developed
infrastructure of the UAE, as well as its extensive road network, further
increases the attractiveness of luxury cars among the consumers. The presence
of a wide range of expatriate populations with high disposable income further
increases the demand for luxurious cars, as they seek to live a luxurious life
and experience premium automotive brands.
