Thinking Of Buying An EV? Good News For You As Resale Value Tops Traditional Vehicles In GCC

AutoData Middle East's bi-annual report on the GCC used car market highlights the increasing demand for electric vehicles (EVs), changes in consumer behaviour, and the growing influence of Chinese brands. The report also covers residual values and the transformation in customer purchasing journeys.

The leading automotive data solutions provider, a subsidiary of World Automotive Group (WAG), supports buyers and sellers in navigating the complexities of the used car sector with confidence and transparency. Let's delve into the demanding factors.

Rising Demand for Electric Vehicles

In the UAE and Saudi Arabia, EV demand is rising due to government initiatives and expanding infrastructure. As of 2024, the UAE ranks eighth globally in EV market readiness, supported by an estimated 325 charging stations. By 2030, the UAE aims to have 10,000 charging stations and reach 50% electric and hybrid vehicles by 2050.

Dubai has reached 25,929 EVs, while Abu Dhabi saw its EV fleet grow to 2,441 models by Q4 2023. This shift towards sustainable transportation has resulted in a rise in EV sales on marketplaces such as DubiCars, which saw a 45% increase from 2022 to 2023, with a further 13% expected growth in 2024.

AutoData's research shows that used electric and hybrid vehicles are outperforming petrol and diesel vehicles in terms of residual value in the UAE. Over the past five years, there has been a 250% increase in EVs and hybrid models due to growing interest and investment. SUVs retain more value compared to sedans, while premium vehicles see a decline after a few years due to higher maintenance costs.

The report notes an increased demand for GCC-spec vehicles, with 86% of Vehicle Report users identifying as buyers interested mainly in models from 2015 to 2020. Toyota and Nissan dominate this market segment with shares of 24.8% and 17.1%, respectively, in Q1 2024. Additionally, leasing services are becoming more popular due to their flexibility and added benefits like free insurance and maintenance.

Consumers in the UAE and KSA increasingly start their car-buying journey online before visiting stores. According to Consultancy Middle East's survey, 83% prefer beginning their purchase via dealer websites while still favouring in-store negotiations at an 85% rate. Platforms like Dubizzle and DubiCars lead this digital space with a combined market share of 73%.

The Rise of Chinese Brands

Chinese automotive brands are gaining traction in the UAE's automotive sector. AutoData reports a demand increase of 150% for Chinese cars from June 2023 to June 2024 on platforms like DubiCars. These brands are favoured over traditional American, Japanese, and European options due to affordability and high-tech features. For instance, new Chinese hatchbacks cost on average 34.5% less than American models.

According to DubiCars, Chinese brands' market share rose from 0.58% in 2022 to 2.68% in 2023. Leading brands include Jetour, Changan, BYD (Build Your Dreams), JAC, and Chery.

Sebastian Fuchs, Managing Director of AutoData Middle East said: "At AutoData Middle East, we are at the forefront of the dynamic and rapidly evolving used car market in the region." He added: "Our commitment to transparency is reflected in our innovative tools like Vehicle Report."

Fuchs also mentioned: "We are excited to launch our new B2B tool – DealRevs – that empowers used car businesses with real-time data for informed decisions." He concluded: "Our services are invaluable for both consumers and businesses navigating the growing used car market."