UAE Luxury Car Market By Vehicle Type (Hatchback, Sedan, SUV/MPV), By Propulsion (ICE, Electric), By Price Segment (Entry Level, Mid-Range, Premium-Range), By Region, Competition, Forecast & Opportunities, 2028

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.