Market Trends of GCC Used Car Industry
This section covers the major market trends shaping the GCC Used Car Market according to our research experts:
Hatchback Segment is Expected to Gain Traction
Owing to the affordability of hatchbacks, the sales of this segment of the used car market were least disrupted during the global pandemic. Hatchbacks are popular for a variety of reasons, including lower taxation than sedans while providing the same performance and comfort. Furthermore, because there are so few new models that qualify for these tax breaks, the price of used hatchbacks remains unaffected. When it comes to secondhand hatchbacks, these vehicles are an appealing alternative to the LCGC and LMPV kinds often utilized by GCC consumers.
Popularly used hatchbacks in GCC includes Infiniti Q30, Volkswagen Golf GTI, MINI Cooper, Renault Zoe, Suzuki Swift Sports, Kia Rio, Chevrolet, and others. These cars are gaining momentum in the market owing to their affordable prices, body style, and offered fuel economy. The hatchback offers better fuel economy compared to sedans and SUVs. These cars fit perfectly for a nuclear and middle-class economy family who look for a better budget car.
Popular banking firms are actively collaborating in order to boost used car sales in the GCC. for instance, in June 2022, the National Bank of Bahrain signed an MoU with Euro motors for financing used car in bahrian. This would help the hatchback customer to get their choice of car financed at affordable rates.
In Septmber 2022, Ministry of Interior in Doha announced the sale of cars through public auctios. Ministry includes all the vehicles that have not records on road and are considered illegal or financial restricted by General Traffic Department for the auction. Players in the market are figuring out the challenges in the business are seen making constructive investments, partnership and launches. For instnace:
- In February 2022, Cars24 a renowned online platform has recently launched AI-enabled software in the United Arab Emirates allowing vehicle enthusiasts to purchase and sell cars within 30 minutes of downloading the program. Customers can also calculate their monthly EMI and track other characteristics like engine, steering, and tires.
With changing consumer preferences in terms of fuel economy, cost, and overall maintenance benefits, demand has been witnessing immense growth for the adoption of the used hatchback. today a diverse range of hatchbacks are on the Saudi Arabia market.
United Arab Emirates to Hold Opportunity Pocket
Weaker economic sentiment in the United Arab Emirates is prompting residents to better opt for more affordable vehicles which are deeply acknowledged by a used car. The local automobile industry in the United Arab Emirates believes that the high digital penetration and strong countermeasures taken by the government are anticipated to stimulate the country's economy and boost the used car segment.
The United Arab Emirates has a significantly high penetration of internet users in the GCC region, and this is primarily attributed to the availability of high-speed internet at an affordable price. In 2021, there were 9.94 million internet users in the United Arab Emirates in January 2022 and the internet penetration rate stood at 99.0 percent of the total population at the start of 2022. This has motivated players to shift their business model from offline shops to online business models to provide an easy and hassle-free experience to their customers.
Changing consumer preferences in the used car landscape has driven the demand for the market. According to Industry experts, kilometers and fuel efficiency has been identified as key factor that is considered when owning a used car in the United Arab Emirates. People in the United Arab Emirates are often given priority to the kilometers as they themselves have witnessed several cases of cheating where wrong kilometer readings are conveyed during sales of used cars. In addition, certified cars have been the top emerging choice of United Arab Emirates consumer who believes in trusted deals. These certified used cars are pre-inspected and offer post-maintenance service plans to consumers for longer-term relationships between consumers and dealers.
Considering these factors, demand for a used cars in the United Arab Emirates is expected to witness a high growth rate during the forecast period.
