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The automobile industry has experienced an average growth annually for the last twenty years. The UAE automobile industry is dominated by cars from Japan, Europe, and America (Krane, 29). The most common Japanese cars are Toyota, Honda, and Lexus. The most common European cars are BMW, Audi, Volkswagen, Landrover, and Mercedes Benz. Automobile brands from the US that are also common in the UAE market are Chevrolet, Ford, and Chrysler, among others (Oxford Business Group par. 6). The table below summarizes the market share of Japanese, European, and American cars in the UAE market within the last 20 years.
(Source: UAE Automobile Industry)
From the above table, the market share chart for each year was generated, as indicated below.
From the above chart, the trend line for market share for American, Japanese, and European cars in the UAE over the last twenty years was derived as indicated below.
Executive Management Analysis
From the above chart and trend line, it is apparent that the Japanese cars occupy the largest share of the market from the year 1994 across the two decades (from 46% to 68%). The second position is held by European cars, which had experienced a steady decline over the years in the market share up to the year 2011 when the trend started rising. American cars are the least popular in the UAE market, with an average market share of 14% over the last two decades.
The largest market share occupied by Japanese cars can be attributed to their affordability and cost of maintenance. Since the average income in the UAE is AED 10,000, automobile customers would find the Japanese cars more affordable than other brands from the US and Europe (Shihab par. 7). On average, the cost of acquiring a Japanese car is almost 40 to 60% cheaper than the cost of acquiring cars from Europe and the US.
Another factor that can explain the dominance of Japanese cars within the UAE market is a preference by UAE residents to buy used cars that are affordable. In the last two years, the growth of the used car market in the UAE has expanded by 36%. The majority of the used cars in the UAE market are Japanese cars because they are very affordable as compared to the used cars from the US and Europe (Trassard par. 11). Most car imports from Europe and the US serve high-end customers who prefer luxury and high performance. Since this group consists of less than 10% of the population, the penetration of the US and European cars are limited to this segment (UAE Automobile Industry par. 5). On the other hand, the Japanese cars target the low-end clients in the UAE who consist of more than 70% of the population, thus the giant market share (Arabian Gulf’s Consumer Spending Boom par. 8).
Works Cited
Arabian Gulf’s Consumer Spending Boom to Sustain Strong Car Sales for Years 2013. Web.
Krane, John. City of Gold: Dubai and the Dream of Capitalism, New York, NY: Picador, 2010. Print.
Oxford Business Group. The Report: Dubai 2014, Oxford, UK: Oxford Business Group, 2014. Web.
Shihab, Mohamed. Economic Development in the UAE. 2013. Web.
Trassard, Pauline. Mobile and Automotive Industries: New Business Models Needed to Promote Collaboration. 2013. Web.
UAE Automobile Industry. Overview of the Industry. 2014. Web.
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