UAE's Automotive Sector and the Regional perspective - rak realestate

Investment Opportunities in Automotive Sector in RAK -A Sector Study on Automotive Sector in UAE with Regional Perspective

Photograph: Ashok Leyland’s

Bus Assembly plant in RAKIA

Industrial Park in Ras Al

Khaimah (UAE)

December 2009

2

Contents

Executive Summary 3

Introduction

The Changing Nature of Global Manufacturing 6

The Changing Nature of Supply Chain 8

Global Automotive Production & Major Players 10

Automotive Production in the Middle East 12

GCC Automotive Sector

GCC Economic Outlook-Macro-economic Indicators 13

GCC Macro-economic Indicators 13

GCC Auto Industry SWOT 15

Outlook for GCC Automotive Sector 16

GCC Competitive edge 17

Vehicle Assembly in GCC 19

GCC Source of imports 19

GCC Highlights-Foreign trade in Automotive sector 21

UAE Automotive Sector

UAE Auto Industry SWOT 22

UAE Economic SWOT 23

UAE Business Environment SWOT 23

UAE Automotive Sector trade 24

Automotive Manufacturing in UAE 31

Low cost and Luxury car market in UAE 33

Used Car Market in UAE 35

After- sales Business in UAE 36

Car Rental Market in UAE 37

Rationale for setting up projects in RAK 38

Identified Projects 38

UAE Auto Industry Forecast Scenario 54

Automotive Products & Free Trade Agreements 56

About Ras Al Khaimah 57

About RAK Investment Authority 59

References 64

Annexure

I World Motor Vehicle Production By Country And Type In 2008 65

II World Ranking of Vehicle Manufacturers In 2008 66

III UAE Imports & Re-exports of Vehicles in value term 67

IV List of Automobile Component Manufacturers in GCC 68

V-A UAE Trade figures on components 2006-1008 In value term 70

V-B UAE Trade figures on components 2006-1008 In Numbers 71

VI-A UAE Trade on Tyre & Tyre Products-2008 72

VI-B UAE Trade on Tyre & Tyre Products-2007 73

VII Key Global Tyre Manufacturers Contact Details 74

VIII UAE Trade on Vehicle Battery (Accumulators)-2006-2008 75

IX UAE Trade on Electrical Ignition System-2006-2008 76

X List of UAE car dealers 77

References…..

1. Hiromi Oki, “Where intra-

regional trade in East Asia is

heading”, JETRO Research Paper

Vol. 06, 2008,

2. Changing Features of the

Automobile Industry in Asia - Asia-Pacific Research and

Training Network on Trade

Working Paper Series, No. 37,

July 2007

3. Dubai Chamber of Commerce

Economic Bulletin, vol-4, issue-

35, May 2007

4. OICA Statistics on global motor

vehicles production

5. Trade Statistics-2008, Dubai Port

& Customs, Dubai World

6. BMI report on UAE‟s Auto sector

2009

7. GOIC report on sector study on

Automotive Industry in GCC

2009

8. Dubai Chamber of Commerce

Economic Bulletin, vol-4, issue-

35, May 2007

9. Dow Jones Factiva database of

compaies.

Websites:

http://www.researchandmarkets.com

/reports/

http://www.worldbank.org

http://www.unido.org

http://www.gulfnews.org

http://www.khaleejtimes.org

http://www.worldbank.org/

http://www.unido.org/

http://www.gulfnews.org/

http://www.khaleejtimes.org/

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Executive Summary

As automobile industry is becoming more and more

standardized, the level of competition is increasing and

production base of most of auto-giant companies are being

shifted from the developed countries to emerging markets

in developing countries, to take the advantage of low cost

of production. Thus, many developing countries are

making serious efforts to grab these opportunities. The

share of developing countries in global exports of

passenger motor vehicles increased from 11 per cent in

1999 to 18 per cent in 2006. Emerging markets will

contribute about two thirds of the growth in global light

vehicle assembly between 2006 and 2014.

State of the Global Automotive Industry

The supply chain of auto industry has completely changed

over the years. Major OEM (original equipment

manufacturer) players world-wide are increasingly

focusing on basic design and assembly operations as well

as servicing the after-sales market and prefer to deal with a

smaller number of large suppliers. Consequently, the

supply chain is morphing into sub-system integrators,

component makers, and commodity players.

With the gradual opening up of the component sector, now

the challenge is for individual governments to support the

development of domestic critical component and sub-

system suppliers through, interalia, improvement in the

investment environment, stronger patent regimes and

incentives for R&D.

Free trade agreements can have important implications

for the automotive sector because of the improved access

(addressing both tariff and non-tariff barriers) which they

can provide and because of the reduction in tariffs which

Highlights…

Global The share of developing countries in global exports of

passenger motor vehicles increased from 11 per cent in

1999 to 18 per cent in 2006.

Global production of passenger cars and commercial

vehicles grew at a rate of 4to 5% between 2002 and

2007.

In 2007 the world production of automotives reached

73.27 million units

In 2008 the production fell by -3.7% due to global

recession. Out of this 75% was car and balance

commercial vehicle

About 69% of the total production was limited to top

10 companies.

In the Middle East, Iran and Egypt are the two main

producers of automotives. Approx.1.1 million units

were produced in 2007 at a CAGR of 12.4%.

Highlights…

GCC There is no significant manufacturing of Vehicles.

Manufacturing is limited to a few assembly lines for

bus and trucks.

Saudi Arabia and the United Arab Emirates (UAE)

are the two high- consumption markets within

GCC

4-5ml passenger cars in the GCC, out of which

1.4million are in UAE

UAE constitutes about 30% (2007) of the total

GCC‟s demand.

No significant manufacturing of vehicles except some

assembly lines.

In 2008 GCC imported 1.2 ml vehicles. About 80%

constitutes passenger car and rest trucks & buses.

The growth in terms of value of imports of vehicles in

GCC was @ 22% with $24.14bl of imports in 2007.

Japanese automobiles dominate the GCC auto market

with 60.98%, while the rest of the pie was shared by

Korean brands at 13.78%, American brands at 10.15%,

and European brands at 8.20%.

There is no significant manufacturing of components.

A few small scale manufactures are the active and

catering to the requirements of aftermarket.

The value of import of new tyres has gone up from

USD 817 million in 2003 to USD 1.3 billion in 2007

(CAGR 12%).

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can occur under them. Modern agreements typically also

cover a wide range of issues other than tariffs and these

can be relevant to trade in automotive products or

services.

Global production of passenger cars and commercial

vehicles grew at a rate of 4 to 5% between 2002 and 2007.

In 2007 the world production of automotives reached 73.27

million units. In 2008 however, the production fell by -

3.7% due to global recession to 70.53 million consisting of

52.6 million (75%) cars and 17.9 million (25%)

commercial vehicles.

About 69% of the total production was limited to top 10

companies. This level of output was equivalent to USD

2.8 trillion. It employed over 8 million workforce directly

and five times as much indirectly. Thus nearly 50 million

workforce depend on auto industry for their livelihood.

Middle East in general and Gulf Cooperation

Council (GCC) in particular is a fast growing market for

automotive industry. The region has a high ratio of cars

per household. GCC countries with their high GDP is a

high consumption vehicle market and present enormous

untapped opportunities for the manufacture of vehicles

and its components. The combination of relatively high

living standards, a growing population in the region, as

well as favourable oil prices, have been the key driving

forces behind the growth in the auto sector in the region.

Despite an expected slowdown in auto sales during 2008-

2009, the outlook based on resurgence in consumer

demand on the back of a pick-up in the global economy

is likely to lead to robust growth in 2010 and beyond.

Whilst the GCC (Consisting of UAE, Saudi Arab,

Kuwait, Oman, Qatar and Bahrain) does not possess a

sizable domestic automobile manufacturing, its high

national wealth has created a niche market for sales of

imported vehicles in recent years, and there is a large re-

export trade based on the country‟s regional status as a

key strategic location, With almost 4m passenger cars in

the GCC, out of which 1.4million are in UAE; this region

offers opportunities for car parts and accessories

distributors, retailers and the aftermarket industry, in

general, a huge opportunity to enter a market least

affected by the current credit crunch. Saudi Arabia and

the United Arab Emirates (UAE) are the two high-

consumption markets within GCC and present

enormous and untapped opportunities for automotive

manufacturers.. In 2008 total imports in this sector in

UAE was $16.9bl. of which 77% was imports and

balance re-exports. As regards the 2008 distribution of

total trade within this sector by activity, motor vehicles

accounted for 68%, followed by auto component 24% and

tyre was 8% respectively.

Highlights…

United Arab Emirates (UAE)

There is no significant manufacturing of vehicles.

Manufacturing is limited to a few assembly lines

for bus and trucks.

In 2008 total imports in the automotive sector in

UAE was approx. $16.9bl. of which 77% was

imports and balance re-exports. As regards the

2008 distribution of total trade within this sector

by activity, motor vehicles accounted for 68%,

followed by auto component 24% and tyre was

8% respectively. UAE trade of component and accessories in 2008

were $2.8bl out of which 29% was re-exported.

The major source of imports being Japan,

Germany, USA and China The top destinations

(Re-exports) of motor vehicle parts and

components are Iran, Russia, Iraq, Libya and

Tanzania respectively.

The major items of imports are Bumpers & parts,

Suspension shock-absorbers, Parts & accessories

for bodies, Clutches & parts, Brakes and servo-

brakes, Road wheels & parts & accessories and

Steering wheels, columns & boxes

GCC Import of auto components too have shown a

healthy double digit growth. Main components

are: tyres, mounted brake components, gear

boxes, drive axle, components, mufflers and

exhausts, automotive spring (leaf and

helical),glass, lead acid batteries and

accessories such as car radios and air

conditioners. The individual import figures of

major items have been given in the report.

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Despite the size and potential of the UAE market and its

strategic location and well developed logistic support

system, the emirates still have no significant passenger

car assembly or manufacturing operations, although this

is set to change in coming years. The presence of even a

car assembly line in UAE would open the way for a local

tie-up with a foreign car manufacturer seeking to tap into

growing demand for low-cost cars in Africa, the Middle

East, and Asia.

The UAE has also been making strategic investments in

European auto firms, which could pave the way for

building up a domestic industry. Leading the investment

has been Abu Dhabi‟s Aabar Investment, an Abu Dhabi

investment fund, bought a 9.1% stake in German autos

company Daimler in March 2009.

Swedish automaker Scania‟s and India‟s Ashok Leyland

have set up their trucks and bus assembly units in UAE.

However, considering the potential, the manufacturing in

this sector is insignificant and presents enormous

untapped opportunities for the manufacture of vehicles

and its components

One of the strategies of UAE has been to promote

industrialization away from oil and gas based industries

in order to ensure a stable broad based economy for a

balanced growth in the medium to long term. Automotive

industry is an ideal investment scenario. Besides saving

expensive imports, it tends to drive all-round

development by investing in R&D, developing

ancillary industries and generating employment

opportunity for the local population. UAE has taken a

number of steps in broadening the industrial base away

from oil and gas.

The competitive edge of the UAE lies in its excellent

infrastructure such as roads, sea ports, power and

telecommunication and geographical proximity to

MENA, Europe and Asian markets. Apart for this, UAE

has a stable government and sound macro-economy; high

per capita GDP & high standard of living. Fiscal Benefits

include 100% income and corporate tax exemptions,

100% capital and profit repatriation, fully convertible

currency, no financial risk and relatively low Inflation.

Regulatory benefits include 100% ownership in Free

Zones, no trade barriers or quotas, easy licensing

procedures & company formation, liberal labour laws

and no restrictions on hiring expatriate. All these

contribute to lower cost of operations.

Identified Projects for RAK (UAE)

Based on import substitutions of major components

Car/ bus/ trucks assembly/ manufacturing unit

Tyre & Battery manufacturing units

Auto components manufacturing units of both

metallic and plastics particularly,

Bumpers & parts

Suspension shock-absorbers

Parts & accessories for bodies

Clutches & parts

Brakes and servo-brakes

Road wheels & parts & accessories,

Car Air conditioners

Automobile ignition system

Rationale for Setting up Project in RAK (UAE)

Competitive Landscape e.g.

Benefits 100% income and corporate tax exemptions

100% capital and profit repatriation,

Fully convertible currency

100% ownership in free zones

Exemption of equipment and raw material required by

industrial units from customs duty.

No trade barriers or quotas,

Easy licensing procedures & company formation,

Liberal labour laws

No restrictions on hiring expatriate.

Sound Macro-economy & favourable Govt. policies

Excellent infrastructure and logistic support system

Increasing demand for vehicles and components

Strategically located

Base for Raw materials- Aluminium, Plastics and

float glass Aluminium -DUBAL (Dubai)

Plastics-ADNOC(Abu Dhabi), SABIC (KSA)

Glass- Guardian (RAK), Emirates Float Glass (Abu

Dhabi)

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Introduction

The automotive sector, comprising of the automobile and auto component sub sectors, is one of the key segments of the

economy having extensive forward and backward linkages with other key segments of the economy. The automotive

industry is no stranger to change. Many of the changes occurring in the global marketplace today - tightened credit

markets in a capital-intensive industry, declining consumer confidence, increased government involvement - are the

most recent manifestations of this reality.

The combination of these new realities with familiar industry challenges such as volatile raw materials costs and fuel

prices, tighter regulations, capacity and sourcing challenges and the need to satisfy consumer demand for cleaner,

greener cars, have combined to create a business environment that has had a profound effect on the global automotive

industry.

With the global economy in the midst of its worst recession, cash conservation has been the key element to survival for

many automotive companies. However, to survive and prosper successful companies still have to invest for the future.

The silver lining for the auto industry is that the price of oil is set to remain softer during this global downturn, as are

commodity prices. Some experts feel the global slowdown in the auto sector, although harsh, will not be as

pronounced as that during the recession of the early 1990s thanks to the strength of the BRIC nations (Brazil, Russia,

India, and China).

The Changing Nature of Global Manufacturing and Trade in Automotive Products and Services

As automobile industry is becoming more and more standardized, the level of competition is increasing and production

base of most of auto-giant companies are being shifted from the developed countries to developing countries to take the

advantage of low cost of production. Thus, many developing countries are making serious efforts to grab these

opportunities. Auto-giants such as General Motors, Ford, Toyota, Honda, Volkswagen, and Daimler Chrysler, to shift

their production bases in different developing countries which help them operate efficiently in a globally competitive

marketplace.

Different countries adopted different policies to handle the overcapacity problem in the sector. Specialization in

automobile sector is increasingly becoming segment specific as each of these countries is finding its niche. For example

in the emerging markets e.g. China is specalising in components, India in two wheelers and small vehicles, Thailand in

pick-up trucks and passenger cars and Indonesia in utility vehicles. Thailand is exporting to developed countries and

strengthening its position in ASEAN. Indonesia is also increasing its trade relation with ASEAN. India is concentrating

on Middle East and south Asia beside traditional developed country destinations. With the gradual opening up of the

component sector, now the challenge is for individual governments to support the development of domestic critical

component and sub-system suppliers through, interalia, improvement in the investment environment, stronger patent

regimes and incentives for R&D.

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As with other industries, reductions in trade barriers and lower shipping costs, among other factors, have led to

changes in the global automobile industry. These changes include increased demand for and production of vehicles

in developing countries; the adoption of more globally focused strategies by major automotive producers (of both

vehicles and parts); the development of integrated supply chains, including the use of e-commerce; increased

involvement by suppliers, including in the development, manufacture and bearing of risk; greater diversity of roles

among suppliers, ranging from specialist suppliers to component integrators; and highly specialised trade in vehicles

and components. These changes have resulted in significant restructuring within the industry, particularly among

parts manufacturers, with first-tier suppliers typically operating on a global basis.

According to JETRO data, the share of developing countries in global exports of passenger motor vehicles increased

from 11 per cent in 1999 to 18 per cent in 2006. Papers released for the Review suggest that “emerging markets will

contribute about two thirds of the growth in global light vehicle assembly between 2006 and 2014”. The papers also

note that the automotive components industry is becoming increasingly global, with many companies now having a

production network of well over 20 locations around the world. Manufacturing services, such as design and research

and development are increasingly performed on a worldwide basis.

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In some respects, however, the motor vehicle industry has not changed as much as other sectors. In contrast to

the information, communications and telecommunications industry, where tariff barriers are mostly at zero as a

result of the WTO Information Technology Agreement, regional and global production networks remain less

significant. This is reflected in the patterns of trade - in East Asia “external trade [i.e. primarily export of assembled

vehicles] is greater than intra-regional trade [of both vehicles and parts] and in investment patterns, as countries,

remain focused on getting behind tariff barriers rather than efficiency-seeking production.

While these factors have all operated to reduce the opportunities for the significant growth of production networks,

the experience of other industries suggests that, as barriers are reduced further - through unilateral action and

bilateral, plurilateral and multilateral agreements - intra-industry trade will increase, bringing with it

opportunities in particular for trade in specialised parts and vehicles.

The Changing Nature of Supply Chain:

The supply chain of auto industry has completely changed over the years. Major OEM (original equipment

manufacturer) players world-wide are increasingly focusing on basic design and assembly operations as well as

servicing the after-sales market and prefer to deal with a smaller number of large suppliers. Consequently, the supply

chain is morphing into sub-system integrators, component makers, and commodity players. The segregation is

increasingly defined by „risk sharing‟ which was earlier defined by only „cost pressure‟. Tier 1 suppliers (concentrating

on system supply, module assembly and sub supplier management) are taking increasing risk from major players

shifting the cost pressure to Tier 2 supplier who concentrate only on production of sub components.

In general, suppliers can be divided into few groups such as Systems Integrator (capable of designing and integrating

components, subassemblies), Global Standardized–Systems Manufacturer (specialist in design, development and

manufacturing of complex systems), Component Specialist (produces specific component or subsystem for a given car

or platform) and Raw Material Supplier. Many companies (such as Volkswagen and Renault) feel that a mono-supplier strategy (such as in Ford) is not good but

having limited number of large suppliers are of a better strategy. Ford pushes the supplier to own the tools, a strategy of

pushing the risk associated with volume fluctuations onto the supplier rather than Ford. On the contrary, Volkswagen

and Renault, are satisfied with 2 suppliers in each region with an additional one having less responsibility but ready

replace any of the existing supplier. Globally, these companies want their suppliers to invest near their plants or transfer

their knowledge to local players. Companies bring the quality standards and price reduction condition while developing

the contract with the suppliers. In general, contract length and overall value are related to price reduction targets that the

supplier is able to commit to. For some of the assemblers, suppliers can also propose alternative designs that have the

same economy results. The experience shows that magnitude of reduction per year varies from 2 to 8 percent due to

achieving economies of scale. The competitive pressure in the industry is increasingly bringing the cost reduction

targets as a major management decision of assemblers. Nowadays, major companies target cost reduction along with the

design and models over a period of time. For example, German companies are targeting price reduction of 13% for the

next generation model. Ford and Renault targets price reduction of 5-8% per annum and the figure is 13% for Toyota

over 3 years

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The components industry is now increasingly concentrating in companies that can design and provide systems and sub-

assemblies across different markets. Several supplier companies were

created by assemblers. In fact, in-house component manufacturing division were given separate identities and

encouraged to compete with other companies. For example, Delphi was created out of

GM‟s component activities. Similarly, Visteon (formerly part of Ford), Magneti, Marelli (Fiat) and ECIA (formerly

owned by Peugeot-Citroen and now fused with Bertrand Faure) were also created in the similar line. M&A activities

among suppliers also became a common feature in 1990s. Lucas and Varity merged in 1996, T&N was taken over by

Allied Signal; Bertrand Faure was acquired by ECIA. New global companies were created through the fusion of smaller

manufacturers also.

In Asia-Pacific region, the growth of component manufacturers has taken a different route. Most of the Japanese

producers followed a tight relationship with their suppliers (independent or quasi-independent). The existence of the

keiretsu system (business affiliation) in Japan greatly facilitated such an arrangement. But other manufacturers

especially Korean, Chinese and Indian gave lot of importance on price and quality while buying from number of trusted

suppliers. As a result of this indigenous auto-component sectors are thriving in many Asian countries though some

MNCs are also present.

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Global Automotive Production & Major Players

The global automotive industry is a highly diversified sector that comprises original equipment manufacturers (OEM),

component suppliers, dealers and agents, service stations, environmental & transport safety groups, and trade unions.

The growth in world production of automotives is given in Fig.1.

WORLD MOTOR

VEHICLE PRODUCTION

in million units

Year Quantity

2003 60.66

2004 64.50

2005 66.48

2006 69.22

2007 73.27

2008 70.53

Source- OICA Statistics Fig-1 Global production of automotives

According to Fig. 1 above, world production grew at a rate of 4% between 2002 and 2007. In 2007 the world production

of automotives reached 73.27 million units. In 2008 however, the production fell by -3.7% due to global recession to

70.53 million consisting of 52.6 million (75%) cars and 17.9 million (25%) commercial vehicles ( Fig-2).

Category wise distribution of 2008 production

in million units

Type Cars

Commercial

Vehicles

Quantity 52,637,206 17,889,325

Source- OICA Statistics

Fig-2 Product distribution

Region wise breakup of automotive production in 2008 is shown in Fig.3.According to this, Asia pacific, Europe and

NAFTA countries contributed maximum towards world production in 2008. (Annexure-I)

60,6664,50 66,48 69,22

73,27 70,53

0,00

10,00

20,00

30,00

40,00

50,00

60,00

70,00

80,00

2003 2004 2005 2006 2007 2008

Qu

anti

ty in

mill

ion

s

World Vehicle Production in 2008

Cars75%

Commercial

Vehicles25%

Category wise distribution of 2008 production

11

World Motor Vehicle Production By Region In

2007-2008 in million units

Region 2007 2008 % Change

Europe 20,834,089 19,590,808 -5.90%

CIS 2,018,489 2,179,977 8.00%

NAFTA 15,454,764 12,974,058 -16.10%

South America 3,699,295 3,942,457 6.60%

Asia-Oceania 29,717,618 30,204,954 1.80%

Middle East 1,101,713 1,166,212 5.80%

Africa 440,093 468,065 7.00%

Total 73,266,061 70,526,531 -3.7%

Source- OICA Statistics Fig-3 Global production of vehicles by region

Auto industry produced over 70 million vehicles in 2008. About 69% of the total production was limited to top 10

companies. This level of output was equivalent to USD 2.8 trillion. It employed over 8 million workforce directly and

five times as much indirectly. Thus nearly 50 million workforce depend on auto industry for their livelihood.

World Ranking of Top 10 Vehicle Manufacturers in the World in 2008 (Annexure-II)

Refer Annexure- for the list of top 50 companies and their production

Rank Total CARS LCV HCV

HEAVY

BUS

1 TOYOTA 9237780 7768633 1102502 251768 114877

2 GM 8282803 6015257 2229833 24842 12871

3 VOLKSWAGEN 6437414 6110115 271273 46186 9840

4 FORD 5407000 3346561 1991724 68715

5 HONDA 3912700 3878940 33760

6 NISSAN 3395065 2788632 463984 134033 8416

7 PSA 3325407 2840884 484523

8 HYUNDAI 2777137 2435471 85133 151759 104774

9 SUZUKI 2623567 2306435 317132

10 FIAT 2524325 1849200 516164 135658 23303

Sub-total 47,923198 39,340128 7,496028 812961 274081


Europe27%

CIS3%NAFTA

18%South America

5%

ASIA-OCEANIA

44%

Middle East2%

Africa1%

World Motor vehicle production by region in 2008

12

Automotive Production in the Middle East

Middle East in general and Gulf

Cooperation Council (GCC) in particular is

a fast growing market for automotive

industry. The region has a high ratio of cars

per household. GCC countries with their

high GDP is a high consumption vehicle

market and present enormous untapped

opportunities for the manufacture of

vehicles and its components.

The combination of relatively high living

standards, a growing population in the

region, as well as a resurgence in oil prices,

have been the key driving forces behind the

growth in the auto sector in the region.

Despite an expected slowdown in auto sales

during 2008-2009, the outlook based on

resurgence in consumer demand on the back

of a pick-up in the global economy is likely

to lead to robust growth in 2010 and beyond.

In the Middle East, Iran and Egypt are the two main producers of automotives in the region. Production of automotives in

the Middle East is shown in Fig.4 According to this, the production of automotives increased from 0.88 million units in

2005 to 1.1 million units in 2007 at a CAGR of 12.4%.

Middle East automotive production in 2008

Year Egypt Iran Total % change

2005 64,549 817,200 881,749

2006 91,518 904,500 996,018 12.96%

2007 104,473 997,240 1,101,713 10.61%

2008 114,782 1,051,430 1,166,212 5.85%


0

200.000

400.000

600.000

800.000

1.000.000

1.200.000

1.400.000

2005 2006 2007 2008Q

uan

tity

Middle East Automotive production in 2008

Egypt

Iran

Total

Fig-4 Middle East Automotive production in 2008

13

GCC Economic Outlook

Gulf economies are benefitting from the global economic recovery. Although it is set to contract this year, real GDP

should bounce back in 2010. Expansionary fiscal policy is a key part of the recovery story. If oil price drops substantially

in 2010, the bullish outlook could be jeopardized. Despite the recovery, private sector activity could still be constrained by

slower growth in bank credit.

In its latest GCC brief, National Bank of Kuwait (NBK) reports that the recent months have witnessed an overwhelming

consensus that the global economy is on the road to recovery, suggesting that the bottom of the financial crisis is behind.

A number of recent economic indicators and signs strongly suggest the crisis has subsided. The most recent projections of

the IMF show the world economy is expected to contract by 1.1% in 2009 and expected to recover 3.1% next year. This

represents an improvement of 0.3 and 0.6 percentage points from the Fund‟s projections three months earlier, respectively.

There is, however, less agreement among economists on the shape of the probable global recovery; “W”, “V”, “U” or

something in between.

The road to this recovery has been cemented to a large extent by governments around the globe expanding fiscal and

monetary policies, bailing out firms, and injecting capital and liquidity in the banking system. Nowadays, new economic

concerns are emerging as governments, including the G20, start talking about the post crisis environment and the proper

timing of an “exit” strategy. “Exit”, of course, entails the withdrawal of governments‟ stimulus, whenever the signs of

solid and durable recovery are established. More likely, such an exit strategy will not be executed in most countries before

the second half of 2010.

World economic recovery is good for the region…. The Gulf economies are definitely among the top beneficiaries of any global rebound. As oil continues to be the major

driver of GCC macro performance, the higher oil prices that started stabilize since June of this year began to gradually

restore regional confidence and to leverage its favorable prospects. Recent consumer confidence surveys show a

substantial improvement relative to earlier in the year. Indeed, the region‟s economic performance and outlook have

always been an oil story. Over the last 10 years, oil accounted for an average of 46% of GDP, 75% of merchandise

exports, 84% of governments‟ revenues. Numbers were even higher in recent years.

The global recovery, if robust, is expected to provide further support to oil prices in the near term. For 2009, however, it

has been projected that the real GDP of the region to contract by 2.5%, affected mainly by cuts in oil production. The

largest GDP contractions are to be recorded in the UAE and Kuwait. Growth in the non-oil GDP of the region is expected

to continue in 2009, though at a slower pace (2%), compared to an average growth of 7% in the previous five years.

Meanwhile, it has been projected that Gulf economies will post 4.8% real growth in 2010, outperforming most regions

around the world. There are, however, some downside risks to this projection.

…. but regional fiscal policies should be supportive Oil prices have been very volatile since Q3-08. The average monthly price of the OPEC basket dropped from USD 131

per barrel in July 2008 to USD 39 in December, but had risen back to USD 78 by late October 2009. The current price

level is considered “fair” by OPEC members who also prefer to see oil prices stabilizing at their current levels. OPEC

members have so far insisted on keeping the cartel‟s production level unchanged, and see no need to reverse the daily 4.2

million barrel in production cut that entered into force since November of last year. Looking ahead, oil prices may move

in either direction depending on a number of issues, including the status of the global economy, demand and supply

conditions for oil, geopolitics, the US dollar outlook, and any other oil-related changes in Western economic policies. Any

forecast of the future direction of oil prices carries more uncertainty than usual. For Gulf countries, the major concern is to

see prices slide again below USD 50 a barrel or below the breakeven price that balances governments‟ budgets. Although

such a scenario would have a negative impact on the region‟s finances and outlook at large, but the net impact would

depend on governments‟ and private sectors‟ reactions to lower oil prices. Historically, government spending programs,

especially on development projects were highly correlated with oil prices. In 2009 for example, and with the exception of

Saudi Arabia and UAE, other GCC countries announced a small rise or a cut in their spending.

If prices witness a substantial drop in 2010 and governments, out of budgetary concerns, decided to reduce spending, then

the bullish outlook of the region would be jeopardized. Instead, Gulf governments would be advised to exploit the positive

atmosphere and to build on it with more spending and more public-private projects. They also ought to pursue economic

reforms and introduce further improvement to the business environment.

14

… as well as banks Banking services are a leading private sector activity in the Gulf region, contributing between 4-12% of the region‟s GDP,

despite the large share of the oil sector. However, the financial results of most banks across the region during the first half

of 2009 show a drop in profits relative to the same period of last year. At any rate, GCC banks have always been among

the strongest and safest banks in the region according to most financial indicators, including capital, profitability,

government backing, and prudent risk management. It is believed that GCC banks have drawn the proper conclusions, like

others around the globe, and should remain healthier and in better shape than banks in other emerging economies. 2010 is

expected to see the resumption of growth in bank intermediation, though at a slower pace than in previous years.

GCC Macroeconomic Data 2006 2007 2008E 2009F 2010F 2011F 2012F 2013F

Real growth (%) UAE 9.4 7.6 7.7 0.9 4.3 6.7 7 6.7

Saudi Arab 3.2 3.4 4.2 0.4 3.3 3.7 4 3.9

Qatar 9.9 8.4 14.3 12.4 19.9 8.6 4.7 3.7

Kuwait 6.3 4.7 8.5 0.7 4.3 5.1 5.4 5.2

Bahrain 6.7 8.1 6.1 2.4 3.1 4.6 4.1 1.4

Oman n/a n/a n/a n/a n/a n/a n/a n/a

Nominal GDP (US$ bn)

UAE 170.1 198.7 240.4 201 232.3 266.7 310.6 360.5

Saudi Arab 356.6 381.7 468.1 331.8 393.6 425.1 455.5 467.3

Qatar 56.9 70.4 95.8 75.2 105.2 127.6 140.6 147

Kuwait 101.7 112.1 148.4 108.6 130.9 14909 165.8 175.3

Bahrain 15.8 17.5 18.6 18.1 19.7 21.6 23.5 25.3

Oman n/a 40.3 n/a n/a n/a n/a n/a n/a

CPI (Average %)

UAE 13.5 13.3 14 4.5 6.5 7.3 6 6

Saudi Arab 2.3 4.1 9.9 1.3 3 3.5 3.7 3.5

Qatar 11.8 13.8 15.1 9.2 8.1 6.5 5.4 5.6

Kuwait 3 5.5 10.8 7 5.6 4.5 4 3.2

Bahrain 2 3.8 7 0.8 2.8 3 2.7 2.5


Population (m)

UAE 4.9 5.3 5.6 5.7 5.9 6.2 6.6 6.9

Saudi Arab 23.7 24.3 25 25.6 26.3 26.9 27.6 28.3

Qatar 1.1 1.3 1.6 1.7 1.9 2 2.2 2.3

Kuwait 3.2 3.4 3.6 3.8 3.9 4.1 4.3 4.6

Bahrain 0.9 1 1.1 1.1 1.2 1.2 1.3 1.4

Oman n/a 2.6 n/a n/a n/a n/a n/a n/a

GDP per capita (US$)

UAE 34,550 37,690 42,690 35,340 39,660 43,030 47,330 52,160

Saudi Arab 15,060 15,700 18,710 12,950 14,980 15,790 16,510 16,530

Qatar 50,190 52,660 61,420 43,670 55,780 62,330 64,970 64,380

Kuwait 31,950 32,980 41,510 28,810 33,280 36,480 38,380 38,460

Bahrain 17,190 16,810 16,510 16,090 16,660 17,390 17,990 18,470

Oman n/a 15,546 n/a n/a n/a n/a n/a n/a

Net FDI (US$ bn)

UAE 1.9 6.6 7.2 3 6.1 4.8 6 6.5

Saudi Arab 17.5 11.2 15 13.6 13.9 14.4 15.7 17

Qatar 32 -4,125 -2,880 -1,290 -2,120 -950 -1,125 -855

Kuwait -8,056 -13,563 -11,078 -9,503 -10,907 -11,994 -13,976 -15,334

Bahrain 1,935 87 -100 320 190 -107 -97 46


Source- Deloitte Touche Tohmastu- Report on GCC macro-economy indicators, E-Estimated; F-Forecast

15


GCC Auto Industry SWOT

Strengths

The regional economy is still liquid with strong current account balances which will sustain growth under the present depressed economic conditions for some time. High business confidence and an increase in disposable income provide a favorable background for the automotive sector.

The SUV and luxury car markets are strong and growing on the back of rising levels of young drivers and disposable income

Fuel prices are the lowest in GCC

GCC has potential to become a base for aluminum and plastics based industry due to availability of raw materials locally. This in turn can be developed into a base for aluminum and plastic based auto component industry

There is no local production of passenger cars in GCC and only a small number of commercial vehicles are assembled.

Weaknesses

The domestic market is largely dependent on international car manufacturers for their style and design, and hence its profitability is hostage to the demands of those major suppliers.

Lack of awareness of automotive quality standards

Opportunities

The used car market is expanding. This will help boost spare parts demand locally.

As a result of climatic conditions and a rugged terrain, there is a vibrant and growing market for accessories and spare parts

Trade liberalization between the Gulf Co-operation Council (GCC) states and the EU will open regional markets to more European imports

Plans for a car assembly plant could help spawn a local automotive ancillary manufacturing industry.

Proximity to markets in MENA region and hence potential for export

Threats

A potential threat exists if other regional suppliers (Egypt, Turkey, Iran and possibly, India) become competitive in a wider range of vehicles. But this threat is not significant to the luxury vehicle market.

16


Outlook for GCC Automotive Market

Whilst the GCC ( Consisting of UAE, Saudi Arab, Kuwait,

Oman, Qatar and Bahrain) does not possess a sizable

domestic automobile manufacturing, its high national wealth

has created a niche market for sales of imported vehicles in

recent years, and there is a large re-export trade based on the

country‟s regional status as a key strategic location,

The current global financial crisis does not seem to have

affected GCC vehicle market significantly according to

market analysts. Major economies such as Saudi Arabia

and UAE are still growing though at a reduced pace during

the slow down phase of global economies. Experts feel the

impact will be significant only if the oil price remains

subdued for a longer duration.

Reported research show that the Japanese automobiles

dominate the GCC auto market with 60.98%, while the rest

of the pie was shared by Korean brands at 13.78%, American

brands at 10.15%, and European brands at 8.20%. With

almost 4m passenger cars in the GCC, out of which

1.4million are in UAE; this region offers car parts and

accessories distributors, retailers and the aftermarket

industry, in general, a huge opportunity to enter a market

least affected by the current credit crunch.

Automotive market in GCC is buoyant. According to one

industry estimate, GCC imported 1.2 million vehicles in

2008. Analysts feel the automotive sector in GCC is growing

at an impressive rate of over 10% annually. The growth in

terms of value of import of vehicles into GCC is given in

Fig.5. Overall, the dollar value of imports has grown at an

impressive rate of 22% CAGR.

Growth in import of vehicles into GCC

In billion USD

Item 2007 2006 2005 2004 2003

Vans and Buses 1.11 0.72 0.62 0.49 0.55

Cars 19.42 14.91 12.06 9.61 8.40

Trucks 3.61 2.10 1.70 1.55 1.78

Total 24.14 17.73 14.38 11.65 10.74

GCC- Highlights

Higher per capita income, growing population

and low fuel cost are driving the demand for

automotives in GCC. This has led to a rapid

development of an automotive market here.

In spite of the current downturn in the world

financial market, auto market in GCC is very

strong.

GCC imported 1.2 million vehicles into GCC in

2008. 80% of these are cars.

Saudi Arabia and UAE are two prime markets

in GCC leading the way. Import of vehicles is

growing at a rapid rate in GCC. The growth rate

is in excess of 10% per annum between 2003

and 2007.

The Automotive component industry too has

shown a double digit growth rate. Large number

of used cars on road and inclement road and

weather conditions are fueling the demand for

spare parts.

Based on import data, import of vehicles into

GCC grew from USD 10.75 billion in 2003 to

USD 24.1 billion in 2007. This is equivalent to

22% CAGR.

Import of auto components too have shown a

healthy growth rate. Main components are:

Tyres, Mounted brake components, Gear boxes,

Drive axle, components, Mufflers and exhausts,

Automotive spring (leaf and helical),Glass,

Lead acid batteries and Accessories such as car

radios and air conditioners.

In the case of vehicles, apart from a handful of

truck and bus assembly units there is no serious

automotive manufacturing activity in GCC

currently. GCC‟s entire demand for cars are met

through import.

In the case of tyres too there is no

manufacturing unit in GCC.

In the case of components, there are

manufacturing units, currently producing these

items in the GCC. But majority of them supply

to aftermarket only.

17

Fig-5 Growth in import of vehicles into GCC

Saudi Arabia and the United Arab Emirates (UAE) are the two

high- consumption markets within GCC and present

enormous and untapped opportunities for automotive

manufacturers. The total automotive market in GCC can be

broadly divided into the passenger cars (including SUVs), trucks,

and buses.

Saudi Arabian Market:

Saudi Arabia with highest population in GCC and blessed with

plentiful oil resources along with its strategic location in the

Middle East is a booming automotive market. Automotive import

into Saudi market is given below. Automotive import into Saudi Arabia

In USD, million

2007 2006 2005 2004 2003

Vans and Buses 400 224 315 247 263

Cars 6,991.00 6,700.00 6,305.00 4,274.00 3,283.00

Trucks 1,385.00 923 1,172.00 862 9,61.0

Saudi- Total 8775 7,847.00 7,791.00 5,384.00 4,507.00

GCC Total 24,141.00 17,730.00 14,386.00 11,646.00 10,748.00

As % of GCC total 36% 44% 54% 46% 42%

As can be seen from above Table, the share of Saudi automotive market has declined over the years to 36% of GCC

market in 2007.The passenger car segment is the largest and the most important segment of Saudi auto market and

contributed around 80% of the total vehicle sold in Saudi market in 2007.

Toyota is the leading market brand in the Saudi Arabia, followed by Nissan. Daimler is the leading automotive firm in

the commercial vehicle market. The German company operates through the Mercedes-Benz brand. In 2004, Japanese

cars captured approximately 36% of the Saudi market with Toyota topping the list with 29.5%. US manufacturers were

0,00

5,00

10,00

15,00

20,00

25,00

30,00

2007 2006 2005 2004 2003

Growth in import of vehicles into GCC CAGR 22%

Trucks

Cars

Vans and Buses

GCC- Competitive edge

The competitive edge of the GCC lies in the following

aspects:

Resilient economies

High per capita GDP

High standard of living

Reasonably low inflation

Favorable tax environment with no personal,

corporate, value added or withholding tax

Favorable business climate

Excellent infrastructure such as roads, power and

telecommunication Geographical proximity to

MENA, Europe and Asia markets

Governmental encouragement

One of the strategies of all GCC States has been to

promote industrialization away from oil and gas

based industries in order to ensure a stable broad

based economy for a balanced growth in the medium

to long term.

Automotive industry is an ideal investment

scenario. Besides saving expensive imports, it

tends to drive all-round development by investing

in R&D, developing ancillary industries and

generating employment opportunity for the locals.

GCC states have taken a number of steps in

broadening the industrial base away from oil and

gas. Incentives given to entrepreneurs are:

Exempt equipment and raw material required by

industrial units from customs duty.

Exempt profits and earnings of industrial

projects from taxes for a specified period.

Assistance in export of goods manufactured

locally.

18

the other prominent manufacturers with 25% market share with GM leading the pack from American suppliers.

Popularity of Australian Built cars is on the rise and sales have improved dramatically since 2006.

Car rental services and limousine services are among the largest buyers of passenger cars in Saudi Arabia. Majority of

car purchases were made through local suppliers although some governmental agencies such as Saudi Arabian National

Guard (SANG), the Ministry of Defense and Aviation (MODA) and the Ministry of Interior (MOI) are believed to

purchase directly from overseas suppliers.

Vehicle Assembly in Saudi Arabia

There is no car assembly plant in Saudi Arabia. The Saudi automotive production base is limited to a handful of firms

that assemble commercial vehicles under contract with foreign automakers. The main brands of commercial vehicles

assembled include, Mercedes, Volvo and MAN Trucks.

National Automotives Industry, Jeddah, operates a truck assembly company in

partnership with Mercedes group Germany. The plant is designed and run by Mercedes.

Components are imported in CKD condition and assembled here.

The plant has a capability to assemble 15-20 trucks per day to make trucks of 20Ton capacity. Products of this

company is sold in GCC as well as exported. Demand for the truck is very strong. This is indicated by the expansion

drive of Mercedes.

Volvo Vehicle truck assembly, Jeddah was set up as a joint venture between Zahid

Tractors, the sole distributor of Volvo vehicles and Volvo Group of Europe. The plant

assembles Volvo trucks from CKD units. The plant has a capacity to assemble 18

trucks per day. However, their current production level is 2 -3 trucks per day.

In January 2009, MAN, together with its Saudi Arabian partner Haji Husein Alireza &

Co. Ltd., opened a truck assembly plant in Jeddah.

The plant is designed to produce 3,000 vehicles a year in single-shift operation. It assembles MAN TGA-WW trucks

and semi-trailer tractors, initially for the local market. In 2007, MAN's share of the market for trucks over 16 tons was

22.7%.

In summary, automotive demand in Saudi Arabia is largely met through imports. The car import is tightly regulated by

the authorities. Prior to 2003, the government set a fixed gross profit margin of 15% for car importers. The ending of

this policy in 2003 stimulated further growth in the market. Nonetheless, until 2005, when the country finally gained

entry to the World Trade Organisation, the Saudi Seaports Authority continued to impose a fixed customs duty,

insurance and freight charge on each vehicle imported into the country. Motor vehicles are currently subject to a 5%

customs tariff. Imported cars are sold through sole distributors who also provide after-sales service. There is greater

competition, however, in the market for spare parts. Sizeable volumes of automotive imports are re-exported to

neighboring countries such as Sudan, Yemen, Djibouti, Ethiopia and Eritrea.

Saudi Arabia Component Sector

Saudi Arabia component market is a dominant one in the Middle East. Saudi automotive component market remains

an import driven market in spite of the presence a large number of local manufacturers. Saudi Arabia imported more

than $650 million worth of parts and service equipment in 2006, compared to $630 million in 2005. Large population

of used cars and extreme weather conditions have boosted the requirement of spares for repair and maintenance.

Presently, Japan, USA, Germany, Australia, and South Korea, are the major suppliers of automobiles, and spare parts.

Tyres come from dozens of countries around the world.

Mercedes

group

Volvo Group

MAN

19

There are over 350 dealers for supplying automotive parts in Saudi

Arabia.U.S. companies command a leading position in the supply

of transmission, steering, suspension, and braking components

and parts. Nonetheless, Japanese car manufacturers and spare

parts suppliers still command the lion share of the Saudi market at

more than 40 %.

Manufacture of components in Saudi Arabia

The automotive component industry in Saudi Arabia comprises

more than 300 small and medium-sized firms manufacturing

and stocking of parts and accessories. Most of these firms have

low capacities. A number of joint ventures for manufacturing have

been established in recent years providing high-volume, fast-

moving car components, especially filters, oils and fluids, batteries,

brakes and exhaust systems. However, majority of these units are

catering to the requirement of aftermarket. The government aims to

encourage further development of car-parts manufacturing as part

of its strategy to develop more industrial production in the

kingdom.

A comprehensive list of major manufacturers under these

categories is given in Annexure -4.

UAE Market:

UAE automotive import market is given in Table next page. As

can be seen from this table, UAE market constituted 30% of the

GCC total. The major suppliers in UAE auto market are Toyota,

Nissan, Mitsubishi, Honda, Mercedes, BMW, Volkswagen, Ford

and General Motors.

UAE Autos Sector - Key Players

Company Segments

Toyota Motor (Al-Futtaim) Passenger, SUVs, Commercial

Ford Motor Passenger, SUVs, Commercial

General Motors Passenger, Luxury, Commercial

DaimlerChrysler Passenger, Luxury, Commercial

Honda Motor (Al-Futtaim) Passenger, SUVs, Motorcycles

Nissan Motor Passenger, SUVs, Commercial

GCC- Source of import

GCC automobile industry relies on imports with

Japan accounting for 65%- 70% of sales, Europe

15%-20%, USA contributing 6.5% and the rest

coming from other countries. Virtually, the

entire car and light vehicles required in GCC is

currently being imported. Barring a couple of

truck units assembling CKD components, there

is no serous manufacturing activity taking place

in GCC to manufacture automotive vehicles.

Leading players in Middle East are:

Toyota tops the Middle East car sales

chart. Toyota recorded Jan to June 2008

sales of 260,000 units up 31% from the

same period 2007. GM sold 128,000 units

in 2007 and ranked 2nd

in 2007 However,

they are likely to be overtaken by

Nissan this year after the Japanese

company's Jan-June (2008) performance

showed an increase of 27 % to more than

74,000 units - nearly 8,000 more than GM.

Others in the Gulf top five are

Mitsubishi and Hyundai with Honda

making up ground after a 52 % sales

increase in the first half of 2008.

Although no official data exists on the

market's overall vehicle sale industry

executives expect sales of new vehicles in

the Gulf market -comprising Saudi Arabia,

Bahrain, Kuwait, Oman, Qatar and the

UAE -to grow to around 1.2 million cars

and light trucks this year, up about 10 %

from 2007.

And recent figures issued by the Japan

External Trade Organisation (JETRO) on

the UAE-Japan trade figures, showed that

the export of cars with engines up to three

litres, surged by 71 % while more high-

powered vehicles increased by 67 %.

20

Automotive import Market of UAE

Unit: USD, million

2003 2004 2005 2006 2007 2008

Vans and Buses 121.00 113.00 134.00 244.00 387.35 766.19

Cars 1,987.00 2,451.00 3,183.00 3,923.00 6,017.88 7,307.52

Trucks 265 177 142 371 956.52 1113.13

UAE- Total 2,373.00 2,741.00 3,459.00 4,538.00 7361.75 9,186.84

GCC Total 10,748.00 11,646.00 14,386.00 17,730.00 24,141.00 N/A

As % of GCC total 0.22 0.24 0.24 0.26 30%

The automotive component segment is also growing rapidly in UAE. In 2008, the UAE automotive parts and

accessories market was estimated to be worth approximately $2.83bl. About 29% of the auto parts and accessories that

have been imported are re-exported to other countries. Auto components are among the top 10 re-export products of

UAE. The main destinations of these re-exports are Middle East, Africa and East Europe. The main sources of the

imports are Japan, Europe and the US.

UAE market for automotive parts is open and highly competitive. Like Saudi Arab, UAE automotive component

market remains an import driven market. There are few companies manufacturing fast moving automotive parts a list of

those major companies has been attached in Annexure-4. Supply of spurious components is the main threat affecting

this sector.

A detailed analysis of UAE Auto sector has been given separately in subsequent chapters.

21


Trade -Highlights

√GCC- Highlights of foreign trade in Automotive sector

Components Import to GCC

1 Import of Vehicles

In terms of USD, the value of net import of vehicles have grown from USD 10.7

billion in 2003 to USD 24.1 billion in 2007. This corresponds to a CAGR of 22%.

2 Import of Tyres

The value of import of new tyres has gone up from USD 817 million in 2003 to

USD 1.3 billion in 2007 (CAGR 12%). In terms of weight of new tyres imported,

the net import rose from 340,000 tons in 2003 to 433,000 tons in 2007. The CAGR

in terms of weight is approximately 6%.

3 Import of mounted

brake components

Import of mounted brake components rose from1,121 ton (USD 12.0 million) in

2003 to 11,558 ton (USD 81.0 million) in 2007 (CAGR 79%).

4 Import of leaf and

helical springs

Import of leaf springs rose from 7,300 tons in 2003 to 13,300 tons 2007 (CAGR

16%).Import of helical springs rose from 2,200 tons in 2003 to 3,500 tons 2007

(CAGR 12%).

5 Import of filter-air, oil,

fuel types

Import of oil and fuel filters rose from 8,960 tons (USD 51million) in 2003 to

13,460 ton (USD 102 million) in 2007 (CAGR 11%). Import of air filters rose from

3,226 ton (USD 37million) in 2003 to 8,930 ton (USD 103 million) in 2007(CAGR

29%).

6 Import of glass

products

Import of toughened safety glass (tempered) rose from 870 tons (USD 8.3 million)

in 2003 to 3600 ton ( USD 30.0 million) in 2007(CAGR 43%). Import of laminated

glass rose from 1,900 tons (USD 10.4 million) in 2003 to 5,240 ton (USD 35.8

million) in 2007(CAGR 30%).

7 Import of accessories

such as car radios and

car air conditioners

Import of car air conditioners rose from USD 5.6 million in 2003 to USD 7.6

million in 2007(CAGR 8%). Import of car radios rose from USD 22 million in

2003 to USD 24.5 million in 2007(CAGR 2%).

8 Import of lead acid

batteries

Import of lead acid batteries has gone up from USD 65.7 million in 2003 to USD

97.4 million in 2007.This corresponds to an increase of 10%.

9 Import of mufflers and

exhausts

Import of muffler and exhausts rose from USD 9.5 million in 2003 to USD 18.5

million 2007(CAGR 18%).

10 Import of Transmission

components (gear box

and drive axles)

Import of gear box has gone up from 3,440 ton (USD 29 million) in 2003 to 4,480

ton USD 55 million in 2007 (CAGR 7%). mport of drive axle components has gone

up from 3600 tons (USD 20 million to 15,370 ton (USD 84 million) 2007 (CAGR

45%).

√GOIC report on Automotive sector

22


Auto Industry SWOT

UAE Auto Industry SWOT

Strengths

The luxury car market is strong and growing on the back of rising levels of disposable income Investment in European auto firms lays the foundation for future partnerships

Weaknesses

There is no local production of passenger cars, and only a small number of commercial vehicles are assembled locally The domestic market is largely dependent on international car manufacturers for the style and design of autos, and its profitability is dictated by their demands

Opportunities

As a result of climatic conditions and a rugged terrain, there is a vibrant and growing market for accessories and spare parts Trade liberalization between the GCC states of Saudi Arabia, UAE, Kuwait, Oman, Qatar, and Bahrain and the EU will open regional markets to more European imports Plans for a car assembly plant could help spawn a local automotive manufacturing industry Car leasing is becoming more attractive with residents preferring to hire a car rather than take out loans

Threats

The rising cost of living is putting pressure on sales and could lead to a decline in the market share of luxury brands, which have led growth in recent years

UAE- Competitive edge

The competitive edge of the UAE lies in the following

aspects:

Resilient economies

High per capita GDP

High standard of living

Reasonably low inflation

100% tax exemptions with no personal, corporate,

value added or withholding tax

100% ownership in free zones

100% repatriation of profits

No restriction on hiring of expatriate workers

Stable Government

Excellent infrastructure such as roads, sea ports,

power and telecommunication Geographical

proximity to MENA, Europe and Asian markets

Low cost of operation (in RAK) compared to

other (Emirates) and GCC countries

Governmental encouragement

One of the strategies of UAE has been to promote

industrialization away from oil and gas based

industries in order to ensure a stable broad based

economy for a balanced growth in the medium to

long term.

Automotive industry is an ideal investment

scenario. Besides saving expensive imports, it

tends to drive all-round development by investing

in R&D, developing ancillary industries and

generating employment opportunity for the locals.

UAE has taken a number of steps in broadening the

industrial base away from oil and gas.

23


Economic & Business Environment SWOT

UAE- Economic SWOT Strengths

The UAE is a member of the Gulf Co-operation Council, which being a common market can access the GCC market with common favourable terms.

The UAE has one of the most liberal trade regimes in the Gulf, and attracts strong capital flows from across the region

In common with most Gulf states, there are a high number of expatriate workers at all levels of the economy, making up for the otherwise small workforce

The UAE is progressively diversifying its economy, minimizing vulnerability to oil price movements

Weaknesses

The UAE's currency is pegged to the dollar, giving it minimal control over monetary policy and reducing its ability to tackle inflationary pressure

Opportunities

Oil prices are expected to stay high (by historical standards)

Economic diversification into gas, tourism, financial services and high-tech industry offers some protection against volatile oil prices

The construction, tourism and financial sectors are growing rapidly, driven by domestic and foreign investment

Threats

Some bottlenecks have been forming in the

construction sector and there is a chance of delays in several high-profile construction projects

UAE Business Environment SWOT

Strengths

The UAE is a member of the Gulf Co-operation Council, a six member common market, and has been a member of the WTO since 1996

The state has invested large amounts in infrastructure, and will continue to do so over the next 10 years

The UAE's diversified economy reduces risks from volatile oil prices

Weaknesses

Due to the state's federal nature, regulations can vary considerably across the emirates

The regional economy is oil-dependent. This has

historically been very cyclical, which increases

risks for long-term projects

Opportunities

Large number of free trade zones offering tax holidays and full foreign ownership

Comparatively relaxed rules on expatriate employment

The UAE's social stability and relative prosperity

means that there is far less concern for security

than in some other Gulf states

Threats

Oil prices have massively increased liquidity in

the region. This has resulted in strong financial inflows,

24


Trade

Automotive parts, accessories and components are a thriving business in the region, and UAE is the undisputed leader

in the region for the auto parts trade and re-export activities.

Around 29% percent of imported auto goods (spare parts, accessories & equipment) were re-exported to neighbouring

Middle East countries, Africa and the CIS. Iran, Saudi Arabia, Kuwait and Oman are amongst the most important trade

partners. Eastern African states such as Kenya and Sudan have strong trade relations with UAE.

The latest official figures indicate that a total number of 5 to 6ml vehicles are on the road in the GCC countries. Of those,

1.4ml vehicles are registered in the UAE with the figure growing at an annual rate of about 10 percent. The vehicles on

the road in the Arabian Gulf are mainly Japanese (66 percent), followed by European with 23 percent, USA with 6.5

percent and 4.5 percent from other countries.

Trade in Motor Vehicles & Auto Components

In 2008, total trade in this sector accounted for $16.9 billion of which 77% were imports, 23% were re-exports. Locally

manufactured vehicles, spare parts and accessories are sparse. As regards the 2008 distribution of total trade within this

sector by activity, motor vehicles accounted for 68%, followed by auto component 24% and tyre was 8% respectively.

Trade in Motor Vehicles and Components in 2008 in million USD

Items Imports Re-exports Total

Motor Vehicles 9,187 2,287 11,474

Automobile components 2,831 1,146 3,977

Automobile Tyre & Tubes 922 473 1395

Total 12,940 3,906 16,846

Fig-6 Total trade distribution Fig-7 Trade within the Automotive sector

Trade in Motor Vehicles

This activity includes the trade of tractors, motor vehicles for transport of goods and people, cars, special purpose

vehicles. UAE automotive import market is given in Table below. As can be seen from this table, UAE market

constitutes 22-28% of the GCC total during 2003-2007 and increased to 30% in 2008.

Imports77%

Re-exports

23%

Trade Pie

Motor Vehicles

68%

Auto compone

nts24%

Tyre & Tubes

8%

Trade within the sector

25

Table : Automotive import market of UAE (In million USD)

Category 2003 2004 2005 2006 2007 2008

Vans and Buses 121 113 134 244 387.35 766.19

Cars 1,987.00 2,451.00 3,183.00 3,923.00 6,017.88 7,307.52

Trucks 265 177 142 371 956.52 1113.13

UAE- Total 2,373.00 2,741.00 3,459.00 4,538.00 7,361.75 9,186.84

GCC Total 10,748.00 11,646.00 14,386.00 17,730.00 24,141.00 N/A

As % of GCC total 22% 24% 24% 26% 30%

Fig -8 Import of vehicles during 2004- 2008

The passenger car segment in UAE accounted for about 82 % of the total UAE market in 2007 while trucks and buses

together accounted for the remaining 18%.

Fig -9 Percent of Imports & Re-exports in 2008 Fig-10- Share of car, buses & trucks trade in 2008

Imports80%

Re-exports

20%

Trade in 2008- Cars, Bus & Transport Vehicle

0

1000

2000

3000

4000

5000

6000

7000

8000

9000

10000

2003 2004 2005 2006 2007 2008

in m

illio

n U

SD

Automotive import market of UAE

Vans and Buses

Cars

Trucks

Car80%

Trucks and

Buses20%

UAE trade-2008-Share of car, Trucks & Buses

26

Trade in Automobile Components

It is important to note that trade of spare parts, and accessories are related to the trade of motor vehicles. During the period

2007 to 2008, imports within this activity increased annually by 17 per cent, while re-exports grew by 14 per cent,

Import of Components (in million AED) Source- Dubai port & customs, Dubai World

HS Code HS Code Description 2008 2007 2006

87081000 Bumpers & parts 251.12 142.68 78.55

87082100 Safety seat belts 8.20 5.61 2.58

87082910 Luggage carriers 11.84 21.05 6.38

87083000 Brakes and servo-brakes 195.96 1.25 0.00

87083100 Mounted brake linings 3.16 41.62 42.87

87083900 Brakes & servo-brakes & parts-II 51.55 404.35 161.27

87084000 Gear boxes 71.61 56.34 40.26

87085000 Drive-axles with differential, 31.37 48.05 32.06

87087000 Road wheels & parts & accessories 283.27 220.27 196.58

87088000 Suspension shock-absorbers 200.00 304.48 242.86

87089100 Radiators 65.20 51.66 40.23

87089200 Silencers & exhaust pipes 27.32 12.18 12.26

87089300 Clutches & parts 441.09 502.78 228.04

87089400 Steering wheels, columns & boxes 182.83 181.53 97.83

87089500 Safety airbags 6.55 0.05 0.00

87089900 Parts & accessories of vehicle body 8,558.91 6,855.48 5,391.18

Total in million AED 10,389.97 8,867.91 6,591.61

Total in million USD 2831.05 2416.35 1796.10

Re-exports of Components (in million AED) Source- Dubai port & customs, Dubai World


87081000 Bumpers & parts 58.96 48.96 26.28






87084000 Gear boxes 13.35 25.48 15.89




87089100 Radiators 17.22 68.65 46.66


87089300 Clutches & parts 108.73 128.75 78.92


87089500 Safety airbags 0.62 0.01 0.00


Total in million AED 4,206.72 3,693.54 2,487.77

Total in million USD 1146.24 1006.41 677.87

27

Fig-11 Trade of Spare Parts and Accessories during 2006-2008

Imports- Major Trading Partners

Parts like bumpers, brakes, Road wheels & parts & accessories, Suspension shock-absorbers, Clutches & parts, Steering

wheels, columns & boxes and Parts & accessories of vehicle body are the major items traded during 2008. In value terms

constitutes 97% of the total amount of imports in 2008. The major sources of these items and the amount imported in

value terms have been next page. It is internationally known that Japanese, German, American motor vehicle

manufacturers dominate the world market. As a result, a similar representation can be seen with respect to the top import

partners of the UAE automotive market.

Re-exports- Major Trading Partners

On the other hand, the top destinations of motor vehicle parts and components are Iran, Russia, Iraq, Libya and

Tanzania respectively. The Table as given below gives the destination countries in different regions. Re-exports to

Middle Eat constitute 50% of the total re-exports.

Regions Re-exports-2008

Africa 517,483,149

Middle East 2,109,020,953

Cis-Russia 396,182,709

Asia 357,914,786

Europe 283,301,009

Others 542,821,892

Total 4,206,724,498

This can be attributed to the fact that UAE‟s political stability and strategic location within the Middle East has helped

it establish and emerge as regional headquarter for many international market players. In view of above, the buoyancy

of the automotive trade market is a result of the increasing domestic and neighboring countries consumption of

vehicles and related goods and services. However, to further boost this market, avenues surrounding the

encouragement of local manufacturing and assembling of motor vehicles needs to be stimulated in order to gain an

edge over the competitors and market players from other neighbouring countries.

6592

8868

10390

2488

36944207

0

2000

4000

6000

8000

10000

12000

2006 2007 2008

in m

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Auto Component Imports & Re-exports

Imports

Re-exports

Africa12%

Middle East50%

Cis-Russia9%

Asia9%

Europe7%

Others13%

MAJOR DESTINATIONS OF RE-EXPORTS IN 2008

28

Major Re-export Destinations

Region Country Name

Africa Nigeria, Kenya, Tanzania, Algeria, Sudan, Angola, Congo Republic, Ghana, Uganda, Mozambique,

Ethiopia

Asia Singapore, Pakistan, Afghanistan, Hong Kong

Middle East Iran, Iraq, KSA, Libya, Egypt, Kuwait, Syria, Yemen, Bahrain, Oman, Lebanon, Qatar

Cis-Russia Kazakhstan, Ukraine, Azerbaijan, Russia

Europe Turkey, Germany, Finland, Italy, UK (United Kingdom)

Major Sources of Imports The major source of imports of the following automobile components, having strong imports and re-exports and volume of trade seen over the years in UAE, have been given below. Each of these components have been discussed separately under the chapter identified projects.

Parts & accessories for bodies (in 2008)

Clutches & parts thereof (in 2008)

Major Sources AED

JAPAN 182,019,154

GERMANY 125,161,324

SOUTH KOREA 41,254,048

CHINA 23,719,789

OTHERS 68,940,566

Total 441,094,881

Brakes and servo-brakes (in 2008)

Major Sources AED

CHINA 42,895,708

GERMANY 42,341,874

JAPAN 26,571,417


USA 16,322,222

OTHERS 46,970,918

Total 195,961,935

Major Sources AED

GERMANY 2,250,738,758

JAPAN 2,151,491,599


USA 857,427,987

CHINA 539,775,411

OTHERS 1,776,684,113

Total in AED 8,558,908,696

Bumpers & parts(in 2008)

Major Sources AED

JAPAN 129,518,989

GERMANY 40,438,403

USA 16,715,145

CHINA 12,673,187

OTHERS 51,775,410

Total 251,121,134

Suspension shock-absorbers (in 2008)

Major Sources AED

JAPAN 82,715,745

GERMANY 40,575,703

CHINA 30,243,377

OTHERS 46,461,975

Total 199,996,800


Major Sources AED

JAPAN 103,767,143

BRAZIL 54,649,599

OTHERS 24,411,426

Total 182,828,168

Road wheels & parts & accessories (in 2008)

Major Sources AED

CHINA 187303058

GERMANY 24385475

USA 14423613

OTHERS 57157734

Total 283,269,880

29

UAE Tyre market

The Middle East is a very important market as it exceeds the growth potential of other areas, such as Europe and

America. The buoyancy of this region is due to its increasing population and continued economic growth. According to

Goodyear, in 2008 saw the industry sell some 25 million tyres into the Middle East. Some countries in the region, which

covers the whole of the Middle East, North and West Africa, are registering annual growth of up to 5%. Another

contributory growth factor is the fact that local product is virtually non-existent and re-treading is still in its infancy in

most countries within the Region. The Table below gives the UAE imports on all types of Automobiles Tyres and Tubes

in 2008

UAE Trade on new All Types of Automobile Tyres & Tubes in 2008 Imports Re-exports

NEW PNEUMATIC TYRES Value (AED) Units Value (AED) Units

cars 1853365027 9636233 1324694809 4898306

buses & lorries. 1190378134 2198087 284566493 565151

argriculture or forestry vehicles 22,579,890 100,365 71,065 405

Industrial handling vehicles < 61 cm 47,346,029 50,155 2,678,296 13,644

of a kind used on construction or industrial handling vehicles>61 cm 9,167,141 4,520 1,179,262 225

of a kind used on agricultural or forestry vehicles & machines. 969519 5193 247606 603

having a herring-bone" or similar tread, n.e.s. 3,170,660 11,167 1,147,181 3,444

of a kind used on agricultural or forestry vehicles & machines 54,418,049 21,847 8,757,438 146,936

New pneumatic tyres of rubber, n.e.s. 95787325 448235 58258875 159414

SUB-TOTAL 3,277,181,774 12,475,802 1,681,601,025 5,788,128

RETREATED TYRES of a kind used on motor cars (including station wagons & racing cars) 633119 2701 2711137 19571

of a kind used on buses or lorries. 3726889 20852 645368 250

SUB-TOTAL 4,360,008 23,553 3,356,505 19,821

USED PNEUMATIC TYRES

Used pneumatic tyres, of rubber 199842 3702 12043841 268279

TYRE TREADS AND TYRE FLAPS Solid or cushion tyres, tyre treads & tyre flaps, of rubber 11,952,010 135,866 2,098,940 1,902

INNER TUBES

For motor cars buses or lorries. 88229683 531643 40286988 206381

TOTAL IN AED 3,381,923,317 13,170,566 1,739,387,299 6,284,511

TOTAL in million USD 921.50

473.95 Source- Dubai port & customs, Dubai World

30

The imports of all types of tyres and tyre products of UAE in 2008 were valued at Dhs 3.4bl ($0.92bl/ 13 million in

numbers),(compared to Dh2.73bl($0.74bl/ 11.9 million in numbers) in 2007 with an increase of 24% out of which about

97% constitute new pneumatic tyres for car, bus and lorries. The growth trend is expected to rise further in 2009. Out of

total import of new pneumatic tyres, car tyres constitute 56% followed by bus & lorry tyres of 36% and rest being tyres

for other end uses. Car tyres worth Dhs 1.85bl and Commercial tyres worth Dhs 1.19bl for buses and lorries were

imported respectively to UAE in 2008, mainly from Japan, China, and India. Out of which UAE consumed almost 66%,

re-exporting 34% mainly to Iran, Iraq, and African countries.

UAE Trade on Pneumatic Automobile Tyres in 2008

Imports Re-exports

Value (AED) Units Value (AED) Units

New pneumatic tyres 3,277,181,774 12,475,802 1,681,601,025 5,788,128

Retreated Tyres 4,360,008 23,553 3,356,505 19,821

Used pneumatic tyres 199,842 3,702 12,043,841 268,279

Tyre treads & tyre flaps 11,952,010 135,866 2,098,940 1,902

Inner Tubes 88,229,683 531,643 40,286,988 206,381

Total in AED 3,381,923,317 13,170,566 1,739,387,299 6,284,511

In Million USD 921.50

473.95

The commercial vehicle market is an essential industry in the

UAE, increase of 35% is expected from 2008 to 2012 according

to industry sources. UAE (particularly Dubai) is a transport-

oriented country with one car for 1.84 residents, and an average

vehicle occupancy rate of 1.7, it has the highest rate of car

ownership than any other city in the world. The absence of

automotive manufacturing industries results in most of the

vehicles and automotive tyres and parts being imported for

domestic use and re-export to other countries.

Break up of Import of Pneumatic Auto Tyres in 2008

Imports Percent

New pneumatic tyres 3,277,181,774 96.90%

Retreated tyres 4,360,008 0.13%

Used pneumatic tyres 199,842 0.01%

tyre treads & tyre flaps 11,952,010 0.35%

Inner Tubes 88,229,683 2.61%

The positive trend for tyre industry is not just limited to the

UAE, but the entire Middle East (with about 4 to 5ml

passenger cars and booming fleet of transport vehicles) is

characterized by a diverse structure of economies, climates

and transport conditions. The lack of railway connections

on the Arabian Peninsula, forces most of the overland-

transport on the road, making it a high-volume sales

territory for tyre manufacturers. Emerging markets in

Africa are sourcing their products from the region, mainly

from UAE. In general, there exists a huge opportunity to

enter UAE market least affected by the current credit

crunch.

Imports66%

Re-Exports

34%

UAE Trade on new Pnematic AutomobileTyres

New pneumatic tyres

97%

Break up of Import of Pneumatic Tyres in 2008

31


Manufacturing

Despite the size and potential of the UAE market, the emirates still have no significant passenger car

assembly operations, although this is set to change in coming years. The presence of a car assembly line in UAE would open

the way for a local tie-up with a foreign car manufacturer seeking to tap into growing demand for low-cost cars in Africa,

the Middle East, and Asia.

The UAE has also been making strategic investments in European auto firms, which could pave the way for building up a

domestic industry. Leading the investment has been Abu Dhabi‟s Aabar Investment, an Abu Dhabi investment fund,

bought a 9.1% stake in German autos company Daimler in March 2009. It agreed to invest EUR1.95bn in the automaker,

making it the largest shareholder in the group. In addition to producing luxury Mercedes-Benz vehicles, Daimler

manufacturers Smart cars, and the two companies intend to team up to develop electric vehicles (EVs). Under the

agreement, an industry training centre will also be established in Abu Dhabi. Such investments would eventually encourage

technology transfer.

Swedish automaker Scania‟s JAFZA plant opened recently. With this new factory, the

automaker will become the first vehicle assembler in the UAE. It will provide completed

vehicles to all states in the GCC.

The plant is modest with a capacity for 1,400 vehicles a year, initially for construction haulage, such as tipper and concrete

trucks, but is to be adapted for bus chassis assembly in the future. It will assemble vehicles from semi knocked down kits

(SKDs), adding locally-sourced components.

Ashok Leyland of India is one of the biggest names in industry set up their assembly

unit in Ras Al Khaimah, the northern most emirate. The company's integrated assembly

plant is to build 1000 buses per year in RAK and has started its operations in the year

2008.This is the first fully integrated Bus/truck manufacturing in the whole of GCC.

In 2008, Hafilat Industries of the UAE won an AED30mn (US$8.17mn) contract to supply locally assembled buses for

export. A new purpose-built plant in the Industrial City of Abu Dhabi has been inaugurated for the assembly of the buses

under licence from Australia‟s Volgren.

The buses will be built on the chassis of Euro IV-compliant Mercedes-Benz models,

imported from Spain, but will take the form of Volgren‟s New Generation City Bus, which

is made from aluminium in order to be lighter and stronger.

Production of the buses began in May‟09, and the order should take four months to fill. Hafilat will assemble double-decker,

compressed natural gas (CNG), hybrid, and trolley buses for public transport. The company occupies a niche in providing in

European-standard buses, through its use of Mercedes-Benz chassis and the Swiss technology used in its assembly

processes.

In 2007, Dubai-based engine producer Praktiko GT announced plans to begin car

production in the UAE. From a new production plant in Dubai Investment Park, the

company plans to produce the Tiger Kub budget model for export to Africa and India,

where small cars under INR100,000 (US$2,500) represent the growth segment.

Investor interest has also focused on bus assembly. Founded in 2003, Trans Continental Industries is the UAE‟s first facility

for manufacturing buses and other additional components and began operations in 2006 with initial capital of AED15.5mn

(US$4.2mn). The company‟s assembly operations are based in the Mussaffah Industrial Complex in Abu Dhabi. It is jointly

owned by Advanced Industries of Arabia (51%), through its UAE partner Bin Jabr Group, and the UK‟s Vectra Azad

(49%). The facility, the first of its kind in the UAE, is planning to expand its manufacturing base, targeting production of

mini buses, school buses, public transport buses, luxury coaches and built-to-order buses. At present, it

manufactures bus bodies and components, including the base structure for chassis, doors and seats.

SCANIA

VOLGREN

Praktiko

Ashok Leyland

32

Also in March‟09, Abu Dhabi state-owned group International Petroleum Investment Company (IPIC) completed its

purchase of a majority stake in MAN Ferrostaal, a unit of German industrial group MAN. The EUR490mn deal will

provide greater market access to countries where Ferrostaal is active.

According to figures published by the Dubai Chamber of Commerce and Industry (DCCI), companies operating in Dubai‟s

automotive sector, including retail, maintenance, repair, parts, and accessories, have an average annual turnover of

AED4.5mn (US$1.23mn) and employ an average of seven people. According to DCCI data, these sub-sectors are

dominated by small-sized companies, those with fewer than 10 employees, and 84% of motor traders fall into this category.

However, 61% of total turnover in the motor trade sector is generated by medium-sized companies with workforces of 10-

99 employees.

In 2007, the DCCI‟s database showed that around 365 companies were actively involved in the trading of motor vehicles

and related items, 2,018 companies were involved in trading of motor vehicle parts and accessories, 204 companies were

involved in the maintenance and repair of motor vehicles, and 73 companies were involved in other activities (trading,

maintenance, and repair of motorcycles and related parts and accessories). These companies collectively employ about

14,400 people. Together they have invested paid-up capital of AED3.1bn and have an annual turnover of AED8.6bn. The

number of traders in spare parts and maintenance represents about 83.5% of the automotive market, with vehicle trade

accounting for 13.7%. Vehicle trading companies employ over 4,100 people, have a paid-up capital of AED1.3bn, and an

annual turnover of AED5.5bn.

UAE component manufacturing sector

UAE has a sizable presence of automotive component manufactures. There are approximately 17 major manufacturers of

auto components such as radiators, filters, exhaust, glass, springs etc. (refer Annexure -IV).

33


Low Cost & Luxury Car Market

Low-Cost Cars

Although the UAE is regarded as a major destination for premium cars, the budget car sector is also growing, as many more

buyers are becoming cost conscious amid the global economic downturn. Many dealers are trying to appeal to price-savvy

consumers, offering finance plans that let them spread their payments out over longer periods. According to Emirates Business, the Tiida from Nissan has gained popularity in Dubai since it became available in 2005, and more attractive

repayment terms are making it possible for families to incorporate the model into their budget.

The increasing popularity of budget cars also suggests that the effects of congestion are taking their toll and consumers

are turning to smaller cars. The number of cars on the road in the UAE and Dubai in particular, has prompted a number

of government measures aimed at reducing congestion, including the Salik road toll and the possible introduction of an

autos-rickshaw service. However, the road toll has, in some cases, backfired, with reports claiming that people are less

likely to be forced out of their cars and into taxis if the toll will push up fares. This creates a market for a smaller, more

cost-efficient way of maintaining independent transport.

Luxury Cars

Sales of luxury vehicles are often used as a barometer of affluence in the MEA. The proportion of prime and luxury car sales

is directly correlated with per capita income. BMI estimates that in the UAE, where GDP per capita is approximately

US$40,000, up to a quarter of car sales fall into this segment.

BMW, Mercedes-Benz, and Audi are traditionally regarded as premium brand car manufacturers, but from the early 1990s

Japanese luxury cars the Toyota Lexus and Nissan Infiniti have gained a strong foothold in the Middle East‟s luxury market.

Non-luxury brands such as Saab have also moved into the segment with premium models, while sports car manufacturers

such as Aston Martin, Porsche, and Maserati have brought out luxury models. In the ultra-luxury niche, Rolls-Royce,

Maybach, and Bentley Cars dominate.

High-income economies such as the UAE tend to have strong demand across the sub-segments of the luxury market.

Despite robust growth and the potential for further rises in sales, for most luxury car brands the Middle East represents just

1-2% of global sales. However, the Gulf is a significant region for ultra-luxury carmakers, buoyed by the high net worth of

many Arab residents and their tendency for opulence and extravagance. In recent years, luxury brands have seen double-

digit growth across the Middle East, with Mercedes-Benz leading the segment. There are demographic variations between

Gulf countries, with expatriates making up 50% of luxury car customers in the UAE, the largest luxury car market in the

Gulf, compared to just 10% elsewhere in the region.

The Gulf countries are, by far, the most competitive in the Middle East in terms of luxury car sales. While

Mercedes-Benz, Lexus, and BMW make up just below 60% of luxury car sales, other groups are seeking

to challenge their dominance, with US carmakers at a competitive advantage due to the depreciation of

the US dollar against the euro. The most competitive market is the UAE, which has the largest luxury car

market in the MEA. BMW‟s exclusive distributor for Abu Dhabi and Al Ain, Abu Dhabi Motors, reported record sales for

the BMW and Mini brands in 2008. New product launches and the availability of servicing and repair packages have helped

the brand‟s growth. Strategic links with the customer are also being strengthened through the expansion of Abu Dhabi

Motors‟ showroom network to include a new showroom in Umm Al Nar, which will be the group‟s largest in the Middle

East. The AED220mn facility will house the BMW, Mini, and Rolls-Royce brands, as well as after-sales servicing bays.

Due for completion in 2010, the centre will take the total number of BMW facilities in Abu Dhabi and Al Ain to 10,

comprising three showrooms, two workshops, two body shops, two car warehouses and a Pre-Delivery Inspection (PDI)

centre.

34

UAE is one of the most important regional and global markets for Rolls-Royce. In 2008, the Gulf region contributed 18% to

car sales, with 216 units sold out of over 1,200 units sold globally. Abu Dhabi and Dubai accounted for sales of 100 units.

UAE is the regional leader and number two globally in terms of market for Rolls Royce. According to TradeArabia News

Service, German autos manufacturer Porsche‟s largest dealership, Porsche Centre Dubai (PCD), of the Al Nabooda

Automobiles group, registered its best ever December sales. In December 2008, sales were up by 50% y-o-y compared with

sales in December 2007, resulting in a 28% y-o-y increase.

Going forward, the UAE is likely to remain the largest luxury car market in the MEA. While luxury car

sales are broadly correlated with per capita income, BMI‟s forecasts suggest some variance between

markets largely due to income distribution. In the Gulf states, the UAE will retain its dominant position as

the largest luxury car market in the region, growing by around 70% over the forecast period (up to end-

2013).

Brand competition is set to heat up throughout the region, particularly in the entry-level segment, where

non-luxury brands are introducing new top-of-the-line models falling into this category. Exchange rates

will also play an important role in determining demand in this segment. These factors will lead to erosion

in the market share of European manufacturers such as Mercedes and BMW, with US carmakers as, to a

lesser extent, Japanese brands likely to reap the rewards of rising demand.

35


Used Car Market

The UAE has positioned itself as a regional exporter of used cars in the Middle East, but the economic downturn has

triggered unprecedented volatility in the second-hand market. Exports have been reeling due to a regulation implemented in

Saudi Arabia in June‟09 that bans the import of cars older than five years old. Lack of demand from Africa has also weighed

on used car sales, according to a report in Emirates Business. One used car dealer told the online newsletter that his

business has fallen by nearly 95%, and another said that prices had dived 40%.

Emirates Business said while used car dealers are suffering, used car auctions are booming. Car auctions often times are able

to offer even lower prices than dealers on second-hand cars, and it isn‟t just consumers who are flocking to the auctions. Banks

which have repossessed cars from owners who have defaulted on loans, as well as rental firms and leasing companies, are also

turning to auction companies to unload their vehicles.

Dubai‟s Used Car Complex hosts nearly 200 showrooms, offering a single place for customers to purchase vehicles. In April

2008, the Dubai Municipality began construction of an AED65mn multi- storey building for storing cars at the complex in Ras

Al Khor. The project is due to be completed in 2009. The storage facility is intended to overcome the shortage of space

currently available by adding 1,500 extra parking spaces for showroom owners in the complex. This is testament to the growth

in used vehicle sales in the UAE.

Elsewhere, in the second-hand premium segment, Mercedes distributor Gargash Enterprises opened a

new showroom for used cars in June 2008. Based in Dubai‟s new autos Market complex, the centre has

the capacity to show 60 models, with plans to further expand the used car division. Gargash announced growth of 13% y-o-y

for its second-hand division in Q1-08, on the back of rising demand in the UAE for second-hand premium vehicles. It

opened its first used showroom in 2006. The centre offers approved used cars from the Mercedes-Benz range, which have

been tested and awarded a two-year warranty. The operator claimed at the time that the new showroom made its Approved

Used Car division the largest in the Middle East, with an inventory of around 500 cars and average annual sales growth of

38%.

Other UAE dealerships are following Gargash‟s example. In June 2008, Western Motors, sole distributor of Jeep in Abu

Dhabi and Al Ain and a member of Alfahim Group, expanded its facilities with the opening of a pre-owned Jeep Car

showroom in Umm Al Nar in Abu Dhabi. Western Motors is projecting used car sales of 200 cars in 2008 with strong growth in

the years ahead.

With new car buyers in GCC countries changing models regularly, the region has a large used vehicle

sector. Older used vehicles are often exported to poorer states in the region, such as Yemen and Iraq. In the GCC itself, there is

a growing demand for quality used vehicles with stringent technical and quality checks before sale. Sales growth shows that

there is still demand for used premium vehicles, despite the influx of small and budget models, marked especially by the arrival

of Chinese brands.

The trend towards nearly-new cars in the UAE is likely to be boosted as a result of new regulations which

will lead to a ban on the registration of all light vehicles aged 20 years and over. This was due to be

implemented from January 2009, but was delayed due to concerns over the impact on people on low incomes at a time of

economic downturn. Currently, Abu Dhabi has 5,600 light vehicles and Dubai and Northern Emirates have 61,400 light

vehicles that are set to be banned under the decree, which is intended to alleviate pollution. From January 2010, vehicles aged

over 15 years were due to be banned, affecting 100,000 vehicles on the UAE‟s roads, although this deadline is likely to be put

back. The decision also involved a ban on the transfer of ownership of light vehicles aged 10 years or above. The government‟s

move will lead to a radical shift in the Gulf automotive market. Old vehicles likely to be exported to other

markets in the GCC over the next few months, helping to drive down used vehicle prices in these

countries. Meanwhile, newer used vehicles, particularly those aged under five years, are likely to rise in

value as they become more sought after.

36


After- sales Business

Despite the lack of a significant vehicle production industry in the UAE, the after-sales business is a

healthy one, with average annual growth of 20%, according to the Autos Parts Merchant Group (APMG), which

represents automotive and spare parts dealers in the UAE. The new car import market is also one of the fastest growing

in the region, as well as a re-export hub for the rest of the Middle East, providing increasing demand for after-sales

services. In the UAE, Japanese brands have the biggest slice of the market, accounting for about two-thirds of all

passenger vehicles, according to an al-Bawaba report. European brands follow with about a 15% share. Korean and US

car brands account for nearly 8% and 4% of the market, respectively.

There are reportedly 4mn passenger vehicles in the Gulf region, with about 1.3mn of them in the UAE. This large number of

vehicles offers much opportunity for the after-sales industry, which is valued at around US$5bn. With an expanding service

infrastructure in place, it now remains to be seen whether vehicle manufacturers will take the plunge in establishing

operations in the Emirates. The possibility has been raised following Abu Dhabi‟s EUR1.95bn investment in Daimler.

In 2007, the UAE-based Sharaf Group signed an agreement to distribute automotive parts and accessories for Japan‟s

Yellow Hat. Under the Master Franchise Agreement, Sharaf will set up at least five stores throughout the UAE over the next

five years, beginning with a store in Dubai in April 2007. Outlets will also be integrated into fuel stations.

Around 50% of imported spare parts and accessories are re-exported to other countries in the Middle East, Africa (where

new destinations such as Libya and Sudan are increasing their share of the UAE re-export trade), and the countries of the

former Soviet Union. The automotive accessories re-export trade is growing at around 15% per year. However, counterfeit

products account for a major slice of the market, estimated at between 30-35% when compared with sales of original

replacement products (40-45%) and the after-market segment, which takes the remainder.

37


Car Rental Market

The UAE‟s rental sector is becoming more competitive, with firms reducing charges to encourage drivers to rent cars

instead of buying them. Car rental is also a cheaper option to buying a car at a time when car loan rejections are rising in the

UAE and expatriates in particular tend to hire vehicles rather than take on more debt. More competitors are also entering the

rental market. According to local media, some used car firms are launching their own rental businesses and giving customers

the option to lease a vehicle.

Rental companies may also be looking to take advantage of the increasing tourist inflow in the UAE. Tourism is a key

pillar in the growth strategies of the individual emirates. Abu Dhabi, for example, plans to increase the number of tourist

visitors from 1.8mn in 2007 to 3.3mn in 2013.

Car rental company Budget Rent A Car has a total of 16 offices in the UAE, including offices at the Abu Dhabi, Dubai

and Sharjah international airports. In Q1-09, DTG, which includes Thrifty Car Rental and Dollar Rent a Car, revealed its

plan to open three new outlets in the UAE. The move increases its locations served to 21 and its workforce to 135. Dollar

also expanded its dealership network with new centres at the Abu Dhabi and Sharjah airports, Fujairah and Ras al-Khaimah.

Furthermore, a new call centre was opened to enhance DTG‟s customer service activities. Dollar‟s expansion includes

adding franchisees in Qatar, Kuwait, Oman, Saudi Arabia, Lebanon and Jordan.

Other rental companies are also expanding their fleets. In February, Audi Dubai (Al Nabooda Automobiles) delivered 330

vehicles to the rental company German Rent A Car. The delivered cars will be used by the rental company to service

government and embassies, the Emirates Group, airlines and tourism companies, several five star hotels, a number of

international and local companies as well as individuals.

Other players in the market include Hertz UAE, which is aiming to become the leading provider of specialist luxury and

sports vehicles in the country; global car and truck rental organization National Car Rental, which has established offices

in strategic locations throughout the country, including Dubai International Airport, and has opened an office in Abu Dhabi

office; and Go Rent a Car, Go International‟s licensee in the UAE, which offers short- and medium-term vehicle hire to

corporate accounts and individuals, as well as offering leasing and chauffeur-driven services.

The car rental sector generally purchase cars in bulk.

Automotive Finance

The automotive market in the MEA benefited from a boom in consumer credit over 2005-2007. With a higher proportion of

premium brands than most developed markets, the value of the automotive finance market in the GCC was worth up to

US$30bn. In the UAE, up to 80% of new car sales depend on financing, and consequently the global credit crunch has put

the brakes on growth in autos sales.

While the global credit crisis is likely to lead to a contraction in the UAE autos market this year, manufacturers and dealers

are taking aim at the problem. In addition to offering the opportunity to lease vehicles, they‟re trying to make credit more

widely available for car buyers. Dealers say there are signs that these efforts are paying off. The head of retail loans at

Emirates NBD, the biggest consumer bank in the UAE, told Emirates Business in July‟09 that there have been „signs of

stabilization‟ in demand for loans.

Banks have had to offer more attractive deals in order to entice buyers, according to local media. Emirates Business reported

offers of zero-down and interest rates as low as 4.5%. According to the online newsletter, the UAE auto finance market is

worth Dh8-10 billion annually, or close to two-thirds of the expected value of the total auto market in 2009. Leading

distributor Al-Futtaim announced in March 2009 that it was teaming up with banks to provide autos loans to buyers who

wouldn‟t normally be able to qualify for a loan because they don‟t earn enough, the Middle East North Africa - Financial Network has reported. In April, HSBC Middle East reportedly halved the minimum salary requirement for consumer and

autos loans to AED10,000. The bank said the move was „in line with current market conditions,‟ Gulf News has reported.

Likewise, Emirates NBD cut its minimum salary requirement for autos loans to AED4,000 from AED6,000, the English-

language newspaper reported.

38

Rationale for Setting up Project in RAK (UAE)

Competitive Landscape of UAE

Government Incentives

One of the strategies of UAE has been to promote industrialization away from oil and gas based industries in order to

ensure a stable broad based economy for a balanced growth in the medium to long term. UAE offers a number of

incentives/ benefits to companies/investors to this effect.

Fiscal Benefits; include 100% income and corporate tax exemptions, 100% capital and profit repatriation, Fully

convertible currency, Exemption of equipment and raw material required by industrial units from customs duty.

Regulatory benefits include; 100% ownership in Free Zones, No trade barriers or quotas, Easy licensing procedures

& company formation, Liberal labour laws and no restrictions on hiring expatriate .

Highlights..

■ Government Incentives

■ Sound Macro-economy

■ Excellent infrastructure and logistic support system

■ Strategic location

■ Increasing demand for vehicles and components

■ Base for Raw materials-Aluminium, Plastic and glass for automotive sector

Sound Macro-economy; High per capita GDP, High standard of living, Relatively low inflation. High

business confidence and an increase in disposable income provide a favorable background for the automotive sector

Excellent infrastructure and logistic support system; UAE has invested large amounts in

infrastructure, and will continue to do so over the next to come.

Increasing demand for vehicles and components; In 2008, total trade in this sector accounted for $16.9 billion

in UAE alone of which 77% were imports, 23% were re-exports. Locally manufactured vehicles, spare parts and accessories

are sparse. As regards the 2008 distribution of total trade within this sector by activity, motor vehicles accounted for 68%,

followed by auto component 24% and tyre was 8% respectively

Strategically located; Easy access to huge markets like Middle East & North Africa( MENA), India, South-East Asia

and CIS countries

Base for Raw materials- Aluminium, Plastic and float glass; UAE has potential to become a base for

aluminum, plastics, glass based industry due to availability of raw materials locally. This in turn can be developed

into a base for aluminum, plastic etc based auto component industry.

Aluminium

DUBAL (in Dubai, UAE) has evolved into a global aluminium producer and presently has a production capacity of more

than 980,000 metric tonnes of quality hot metal per year. More than 92 per cent of DUBAL's total production is

exported to global markets. Presently exporting to 48 countries, with key markets including the Far East, Europe, the

ASEAN region, the Middle East, the Mediterranean region and North America. DUBAL produces extrusion billets for

wheel forging, as well as for automotive applications. DUBAL also produces high purity aluminium used in the

manufacture of electronic components.

39

Plastics

With the drive to reduce fuel efficiency and to meet new emission regulations gaining importance, the attempt to use more and

more plastics in car is gaining momentum. It is estimated that about 13-15% of the weight of an average-sized family car is

now made out of plastic. This compares to about 6% twenty years ago. As an example, the use of Thermoplastic Elastomer

(TPE) in auto industry has increased from 185,000 tons in 1991 to 280,000 tons in 1995, an increase of by 51%.

Currently the auto components are made from plastics are Dash Boards, Manifolds, Air bags, Bumpers, Clutch activating

system, Interior trims, Window glazing and wind shields. Types of plastics used include Thermoplastic Elastomer,

Polyamide, Polyphthalamide, Polycarbonate, Polypropylene, etc. Abu Dhabi Polymers Company Limited (BOROUGE)

under ADNOC (Abu Dhabi, UAE) and SABIC (Saudi Arab) producing basic plastic raw material and a range of

differentiated products for high-value applications including automotive components. With GCC striving to become a

leader in the field of plastics, this is an opportunity to develop UAE as a plastic based automotive component supply base.

Float Glass

There are two major float glass manufacturers in UAE with total approx. capacity of 0.45 million tonnes/ yr, started

operation during 2007-2008 producing glass for use in automotive and also for construction applications

US firm Guardian, UAE‟s dominant float glass supplier, built the UAE‟s first float glass manufacturing facility

(Guardian Zoujaj International Float Glass Co Llc) with joint venture with The National Company for Glass

Investments (Zoujaj) of Saudi Arabia and Zamil Group also of Saudi Arabia, in the RAKIA Industrial park, Ras Al-

Khaimah in 2007. Guardian RAK produces 700 tons of glass per day for use in automotive and construction

applications, including high-performance coated glass. Emirates Float Glass, a subsidiary of Dubai Investments

PJSC, a 600-tons/day float glass facility has launched commercial operations at its manufacturing facility in Abu

Dhabi. The $200 million plant, located at the Industrial City of Abu Dhabi, has commenced manufacture and supply of

premium float glass products to the architectural and automotive markets for local market and exports.. The plant is

built with technological assistance from US-based PPG Industries, global leaders in glass manufacturing technology.

40

Identified Projects

The present study has investigated automotive sector in GCC with major emphasis in UAE, with a view to identify potential investment opportunities. In view of the strong imports seen over the years for vehicles and its components in the GCC, UAE in particular, there is a strong case for the development of automotive industry in UAE. However, Because of its competitive edge in terms favourable investment environment and strategic location, UAE has the potential to become a manufacturing hub for whole range of components, both for OEMs and Replacement/After Market manufacturers and accessories like Light Fittings, HAVC system, Seats. Tyres, Batteries, Fasteners etc. not only to serve the local market but also exports to various markets. However, the emphasis would be to attract Vehicles manufacturers (OEMs), the anchor industry and the catalyst for the development of the whole automotive sector. The identified projects based on strong imports and re-exports and volume of trade seen over the years for vehicles and its components in the GCC/ UAE, have been listed below. However, it requires carrying out detailed feasibility studies before embarking upon projects of this nature.

OEM & Vehicle Assembly Units

Auto Parts Components

Parts & accessories of vehicle body

Clutches & parts

Road wheels & parts & accessories

Bumpers & parts


Brakes and servo-brakes and parts


Electrical Ignition system

Automobile Tyres

Vehicle Battery (accumulators

Please find market/ trade information on the above in subsequent pages.

41

I. Vehicle Assembly Plant

Barring a few truck & bus assembly units there is no major vehicle manufacturer in GCC. GCC therefore depends entirely on import for its vehicle requirement. Annual import of nearly a million vehicles is a strong enough case for setting up a vehicle assembly plant in the GCC. As per import data, the number of vehicle imported into GCC in 2007 is estimated to be approximately 880,000 units. In 2008 approx. 475,000 vehicles (approx. $9.2bl) were imported in UAE alone, out of which about 25% were re-exported. Vehicles assembled in GCC can also have access to MENA markets.

UAE Trade-2007-2008

In ml AED 2008 2007 In no of units 2008 2007

Imports 33,715,713,151 27,017,622,902 Imports 475,567 542,141

Re-exports 8,393,202,038 6,192,020,288 Re-exports 161,041 136,784

Type of Vehicle Imports in Y 2008 in UAE

Category Value (AED) Units

Car 26,818,609,248 408,903

Motor Vehicle for Transport of People 2,811,911,927 16,202

Motor Vehicle for Transport of Goods 4085,191,976 50,462

Grand Total 33,715,713,151 475,567

Type of Vehicle Re-exported in Y 2008 from UAE


Car 6,660,332,310 136,168

Motor Vehicle for Transport of People 242,806,432 3,645

Motor Vehicle for Transport of Goods 1,490,063,296 21,228

Grand Total 8,393,202,038 161,041

0

5.000

10.000

15.000

20.000

25.000

30.000

35.000

40.000

2008 2007

In b

illio

n A

ED

Imports

Re-exports

0,00

0,10

0,20

0,30

0,40

0,50

0,60

2008 2007

In m

illio

ns

Imports

Re-exports

Car80%

Bus etc8%

Transport

vehicles12%

Imports-2008

Car79%

Bus etc3%

Transport

vehicles18%

Re-exports-2008

42

II. Auto Parts Components

Automotive parts, accessories and components are a thriving business in the region, and UAE is the

undisputed leader in the region for the auto parts trade and re-export activities. The total import in the Y2008

was $2.83bl an increase of @17% over the Y2007 while re-exports grew by 14 per cent. The major source

of imports being Japan, Germany, USA and China

Around 29 percent of imported auto goods (spare parts, accessories & equipment) are re-exported to

neighbouring Middle East countries, Africa and the CIS. The top destinations of motor vehicle parts and

components are Iran, Russia, Iraq, Libya and Tanzania respectively. Re-exports to Middle Eat constitute

50% of the total re-exports.

This can be attributed to the fact that UAE’s political stability and strategic location within the Middle East has

helped to establish and emerge as regional headquarter for many international market players. The

buoyancy of the automotive trade market is a result of the increasing domestic and neighboring countries

consumption of vehicles and related goods and services.

The UAE is the second largest car market among the Gulf Cooperative Council (GCC) countries. The latest

official figures indicate that a total number of 4 to 5 million vehicles are on the road in the GCC countries out

of which about 1,4 million vehicles are registered in the UAE with the figure growing at an annual rate of

about 10 percent. The vehicles on the road in the Arabian Gulf are mainly Japanese (66 percent), followed

by European with 23 percent, USA with 6.5 percent and 4.5 percent from other countries.

Because of its competitive edge in terms favourable investment environment and strategic location, UAE has the potential to become a manufacturing hub for the whole range of automotive components, both for OEMs and Replacement/After Market manufacturers, not only to serve the local market but also exports to various markets.

UAE has potential to become a base for the development of automobile and automobile components as the basic ingredients for vehicle and components manufacturing like aluminum, plastics, glass etc are available locally,. Major automobile parts by material and process has been given in Table below. Major automobile parts by material and process

Automotive Part Primary Materials Primary Process

ENGINE

Block Iron, Aluminum Casting

Cylinder Head Iron, Aluminum Casting, Machining

Intake Manifold Plastic, Aluminum Casting, Molding, Machining

Connecting Rods Powder Metal, Steel Molding, Forging, Machining

Pistons Aluminum Forging, Machining

Camshaft Iron, Steel, Powder Metal Molding, Forging, Machining

Valves Steel, Magnesium Stamping, Machining

Exhaust Systems Stainless Steel, Aluminum, Iron Extruding, Stamping

TRANSAXLE

Transmission Case Aluminum, Magnesium Casting, Machining

Gear Sets Steel Blanking, Machining

Torque Converter Magnesium Steel

Stamping, Casting

CV Joint Assemblies Steel Rubber

Casting, Forging, Extruding Stamping

43

BODY STRUCTURE

Body Panels Steel, Plastic, Aluminum Stamping, Molding

Bumper Assemblies Steel, Plastic, Aluminum Stamping, Molding

CHASSIS/SUSPENSION

Steering Gear/Column Steel, Magnesium, Aluminum Casting, Stamping, Forging Machining

Rear Axle Assembly Steel, Plastic Stamping, Molding

Front Suspension Steel, Aluminum Stamping, Forging

Wheels Steel, Aluminum Stamping, Forging

Brakes Steel, Friction Materials Stamping, Forging

SEATS/TRIM

Seats Steel, Fabric, Foam Molding, Stamping

Instrument Panel Steel, Fabric, Foam Molding, Stamping

Headliner/Carpeting Synthetic Fiber Molding

Exterior Trim Plastic, Aluminum Zinc Die Casting

Molding, Casting, Stamping

HVAC SYSTEM

A/C Compressor Aluminum, Steel, Plastic Casting, Molding, Stamping

Radiator/Heater Core Copper, Aluminum, Plastic Extruding, Molding

Engine Fan Plastic, Steel Stamping, Molding

However, from the trend of UAE’s trade volume of auto components (import and re-export), and possible opportunities for expansion of the existing units or addition of new capacities the following auto components have been identified. Parts like bumpers, brakes, road wheels & parts & accessories, suspension shock-absorbers, clutches & parts, steering wheels, columns & boxes and parts & accessories of vehicle body are the major items traded during 2008. In value terms constitutes 97% of the total amount of imports in 2008.

List of Auto Components with substantial UAE trade

HS Code Identified Projects

87089900 Parts & accessories of vehicle body

87089300 Clutches & parts

87087000 Road wheels & parts & accessories

87081000 Bumpers & parts

87088000 Suspension shock-absorbers

87083900 Brakes and servo-brakes and parts

87089400 Steering wheels, columns & boxes

8511-1000 to -9000 Electrical Ignition System

44

Parts & accessories of vehicle body Dents, bumps, scratches and rust - these are just some of the damages that a vehicle’s body parts suffers from. They are caused by numerous factors such as accidents and constant exposure to the elements. Over a period of time, the vehicle’s body parts will begin to exhibit signs of abuse and damage and it will be time to repair or replace it with new components. A car’s body parts include some of the largest pieces of that compose a car’s body such as the front and rear fenders. Both import and re-exports of these items have seen significant increase over the years. There has been an increase 25% of imports in 2008 over 2007 in value term. Similarly, the re-exports had gone up by 19%.

UAE Trade-2006-2008

In ml AED 2008 2007 2006 In no of

units 2008 2007 2006

Imports 8,558.91 6,855.48 5,391.18 Imports 30,309,298 5,606,998 3,684,515

Re-exports 3,665.59 3,072.04 2,088.00 Re-exports 28,208,085 3,151,127 2326588

About 80% of import of these items were from Germany, Japan, South Korea, USA and China.

Source of imports

Major Sources In ml AED

GERMANY 2,250,738,758

JAPAN 2,151,491,599


USA 857,427,987

CHINA 539,775,411

OTHERS 1,776,684,113

Total in AED 8,558,908,696

GERMANY26%

JAPAN25%

SOUTH KOREA

12%

USA10%

CHINA6%

OTHERS21%

Parts & accessories for vehicle bodies

0,00

1,00

2,00

3,00

4,00

5,00

6,00

7,00

8,00

9,00

2008 2007 2006

in b

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Imports

Re-exports

0

5

10

15

20

25

30

35

2008 2007 2006

In m

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Imports

Re-exports

45

Bumpers & parts The bumper is designed to absorb and safe guard against minor and low-speed collisions. Both import and re-exports of these items have seen significant increase over the years. In 2008 the local demand had increased tremendously There has been an increase 76% of imports in 2008 over 2007. In value terms. Similarly, the re-exports had gone up by 20%.

UAE Trade-2006-2008

In ml AED 2008 2007 2006 In no of

units 2008 2007 2006

Imports 251.12 142.68 78.55 Imports 790,993 205,650 210,030

Re-exports 58.96 48.96 26.28 Re-exports 175,947 21,700 29,332

About 80% of import of these items were from Japan, Germany, USA and China.

Source of imports

Major Sources AED

JAPAN 129,518,989

GERMANY 40,438,403

USA 16,715,145

CHINA 12,673,187

OTHERS 51,775,410

Total 251,121,134

JAPAN51%

GERMANY16%

USA7%

CHINA5%

OTHERS21%

Bumpers & parts

0

50

100

150

200

250

300

2008 2007 2006

In m

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on

AED

Imports

Re-exports

0,00

0,10

0,20

0,30

0,40

0,50

0,60

0,70

0,80

0,90

2008 2007 2006

mill

ion

sImports

Re-exports

46

Suspension shock-absorbers There has been an 34% decrease in imports in 2008 over 2007 in value term but in terms of units there was considerable increase in numbers. This is mainly due to reduction in price in 2008 and increase of Chinese market share in this segment with lower price. The re-exports had gone up by 15% in terms of value term. About 77% of import of these items were mainly from Japan, Germany and China.

UAE Trade-2006-2008

In ml AED 2008 2007 2006

In no of units 2008 2007 2006

Imports 200.00 304.48 242.86 Imports 1,169,773 410,777 508,149


The main reason behind China’s increased market share is not only due to aggressive marketing but also the pricing which is considerably lower than others. China has been promoting heavily through some of the established agents and has been able to make a breakthrough by introducing some products in the lower price segment.

Source of imports-2008

Major Sources AED

JAPAN 82,715,745

GERMANY 40,575,703

CHINA 30,243,377

OTHERS 46,461,975

Total 199,996,800

JAPAN42%

GERMANY20%

CHINA15%

OTHERS23%


0

50

100

150

200

250

300

350

2008 2007 2006

In m

illi

on

AED

Imports

Re-exports

0.00

0.20

0.40

0.60

0.80

1.00

1.20

1.40

2008 2007 2006

In m

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s

Imports

Re-exports

47

Clutches & parts

A clutch is a subcomponent of an engine's transmission designed to allow engagement or disengagement of the engine to the gearbox or whatever apparatus is being driven.

There are many different clutch designs, but most are based on one or more friction discs, pressed tightly together or against a flywheel using springs. The friction material is very similar to the material used in brake shoes and pads and used to contain asbestos. The spring pressure is released when the clutch pedal is depressed and the discs are held less tightly and allowed to rotate freely. A wet clutch is immersed in lubricating fluid to keep the surfaces clean and to cool it, for improved performance and longer life; while a dry clutch is not

There was significant increase in imports in 2008 compared to previous years in terms of number of units. However in value terms it was less This may be due to decline in price due to lesser demand. However the volume of trade was quite significant compared to other components.

UAE Trade-2006-2008

In ml AED 2008 2007 2006

In no of units 2008 2007 2006

Imports 441.09 502.78 228.04 Imports 1,835,596 394,930 338,029


Source of imports

Major Sources AED

JAPAN 182,019,154

GERMANY 125,161,324


CHINA 23,719,789

OTHERS 68,940,566

Total 441,094,881

JAPAN41%

GERMANY28%

SOUTH KOREA

9%

CHINA6% OTHERS

16%

Clutches & parts

0,00

0,50

1,00

1,50

2,00

2008 2007 2006

In m

illio

n n

os

Imports

Re-exports

0

100

200

300

400

500

600

2008 2007 2006

In m

illio

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ED

Imports

Re-exports

48

Brakes and servo-brakes and parts There was significant increase in imports in 2008 compared to previous years. However in value terms it was less This is mainly due to increase in Chinese market share (19%) in this segment with pricing considerably lower than others..However the volume of trade was quite significant compared to other components.

UAE Trade-2006-2008

In ml AED 2008 2007 2006

In no of units 2008 2007 2006

Imports 247.51 405.6 161.27 Imports 1,764,751 548,361 445,730


Source of imports

Major Sources AED

CHINA 46,884,445

GERMANY 62,251,233

JAPAN 42,104,277


USA 17,192,137

OTHERS 53,564,048

Total 247,512,667

CHINA19%

GERMANY25%

JAPAN17%

SOUTH KOREA

10%

USA7%

OTHERS22%

Brakes and servo-brakes

0

50

100

150

200

250

300

350

400

450

2008 2007 2006

In m

illio

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ED

Imports

Re-exports

0

0,5

1

1,5

2

2008 2007 2006

In m

illio

ns

Imports

Re-exports

49

Road wheels & parts & accessories Imports of these items have seen significant increase over the years. There has been an increase 29% of imports in 2008 over 2007. However, the re-exports had gone down by 9%. About 80% of import of these items were mainly imported from China, Germany and USA.

UAE Trade-2006-2008

In ml AED 2008 2007 2006

In no of units 2008 2007 2006

Imports 283.27 220.27 196.58 Imports 2,889,040 1,385,680 1,051,517


Source of imports

Major Sources AED

CHINA 187303058

GERMANY 24385475

USA 14423613

OTHERS 57157734

Total 283,269,880

CHINA66%

GERMANY9%

USA5%

OTHERS20%

Road wheels & parts & accessories

0

50

100

150

200

250

300

2008 2007 2006

In m

illio

n A

ED Imports

Re-exports

0,00

0,50

1,00

1,50

2,00

2,50

3,00

3,50

2008 2007 2006

jn m

illio

ns

Imports

Re-exports

50

Electrical Ignition system

The imports of all types of electrical Ignition System in 2008 were valued at Dhs 159 ml ($43ml/ 2.7 million in

numbers), compared to Dh 117ml ($32ml/ 0.07 million in numbers) in 2007 with an increase of 36% in value term. The

growth trend is expected to rise further in 2009. Imports in 2008 were mainly from Japan, Germany, China, UK & USA.

Re-exports were mainly to- Middle East & African countries like Iran, Iraq, Kenya and Pakistan. Re-exports were about

35% in value term.

The ignition system consists of the following,

UAE Trade on Ignition System in Y 2008

Year-2008

HS Code HS Code Description Value (AED) Units Value (AED) Units

85111000 Sparking plugs. 65,783,493 2,410,352 24,946,131 25,039

85112000 Ignition magnetos; magneto-dynamos etc 206,981 1,052 596,664 1,656

85113000 Distributors; ignition coils. 10,374,531 47,824 2,240,557 4,961

85114000 Starter motors & dual purpose starter-generators. 23,277,776 26,943 10,811,500 12,626

85115000 Generators for internal combustion engines,. 30,529,240 58,876 35,581,344 16,917

85118000 Electrical ignition or starting equipment 7,437,748 44,770 2,909,280 2,936

85119000 Parts of electrical ignition or starting equipment 21,460,893 115,850 7,391,844 9,076

Total 159,070,662 2,705,667 84,477,320 73,211

UAE Trade-2006-2008

(Ref Annexure-11 for detailed Break-up)

In ml AED 2008 2007 2006 In no of

units 2008 2007 2006 Imports 159.07 117.15 109.60 Imports 2,705,667 200,104 505,209


0,00

20,00

40,00

60,00

80,00

100,00

120,00

140,00

160,00

180,00

2008 2007 2006

In m

illio

n A

ED

Imports

Re-exports

0,00

0,50

1,00

1,50

2,00

2,50

3,00

2008 2007 2006

In m

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ns Imports

Re-exports

51

III. Automobile Tyres

Based on foreign trade analysis, GCC imported 433,000 tons (net) of tyres in 2007. There are no local manufacturers for

tyres in GCC. Extreme climatic conditions prevailing in GCC shorten the life span of tyres and increase the frequency

of replacement. According to Goodyear, last year saw the industry sell some 25 million tyres into the Middle East.

Some countries in the region, which covers the whole of the Middle East, North and West Africa, are registering annual

growth of up to 5%. Another contributory growth factor is the fact that local product is virtually non-existent and re-

treading is still in its infancy in most countries within the Region.

The imports of all types of tyres and tyre products of UAE in 2008 were valued at Dhs 3.4bl ($0.92bl/ 13 million in

numbers), compared to Dh2.76bl($0.74bl/ 12 million in numbers) in 2007 with an increase of 24%, out of which about

97% constitute new pneumatic tyres for car, bus and lorries. The growth trend is expected to rise further in 2009. Out of

total import of new pneumatic tyres, car tyres constitute 56% followed by bus & lorry tyres of 36% and rest being tyres

for other end uses. Car tyres worth Dhs 0.89ml and Commercial tyres worth Dhs 0.324ml for buses and lorries were

imported respectively to UAE in 2008, mainly from Japan, China, and India. Out of which UAE consumed almost 66%,

re-exporting 34% mainly to Iran, Iraq, and African countries.

UAE Trade on Pneumatic Automobile Tyres in 2008

Imports Re-exports

Value (AED) Units Value (AED) Units

New pneumatic tyres 3,277,181,774 12,475,802 1,681,601,025 5,788,128

Inner Tubes 88,229,683 531,643 40,286,988 206,381

Total in AED 3,365,411,457 13,007,445 1,721,888,013 5,994,509

In Million USD 917.00

469.18

UAE Trade-2007-2008

In bl AED 2008 2007 In mllion

units 2008 2007 Imports 3,365.41 2,764.08 Imports 13.01 12.11

Re-exports 1,721.89 1,781.27 Re-exports 5.99 6.21

0

500

1.000

1.500

2.000

2.500

3.000

3.500

4.000

2008 2007

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Imports

Re-exports

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2,00

4,00

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Imports

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52

Tyre manufacturing is heavily dependent on raw materials like natural rubber (NR), synthetic rubbers (SR) and

carbon black which accounts for 70% of the raw material cost. The major sources of NR are being South-East Asia

and Far East (Thailand, Indonesia, Malaysia, India, Vietnam, China and Sri lanka) which accounts for about 95% of

global production in 2008. The major sources of Synthetic Rubber are being South-East Asia and Far East which

accounts for about 46% of global production in 2008 followed by Europe and USA. All these have to be imported.

Both natural and synthetic rubbers are being imported in UAE for manufacturing of various other rubber products.

UAE trade figure in 2008 has been given below. The major sources of imports of NR being India, Thailand,

Malaysia and Sri Lanka. The major sources of imports of SR being France, Belgium, UK, South Korea.

Netherlands & Germany.

UAE trade on NR & SR in 2008 Source- Dubai port & Customs-Dubai World

IMPORTS RE-EXPORTS

Description Weight (KG) Value (AED) Weight (KG) Value (AED)

Natural rubber

1,789,744 17,810,676 278,487 2,358,589

√Synthetic rubber 27,324,125 233,950,113 1,762,351 17,618,129

Similarly, Carbon Black is being imported in UAE for use in manufacturing rubber products, plastic, inks, paints &

coatings and other end-uses. UAE trade figure in 2008 has been given below. The major sources of imports are being

Netherlands, Germany, India, Iran & USA.

UAE trade on Carbon Black in 2008Source- Dubai port & Customs-Dubai World

IMPORTS RE-EXPORTS

Description Weight (KG) Value (AED) Description Weight (KG)

Carbon Black 15,564,719 86,326,022 1,192,764 4,930,562

53

IV. Vehicle Battery (Accumulators)

A car battery is a type of rechargeable battery that supplies electric energy to an automobile. Usually this refers to an

SLI battery (starting, lighting, ignition) to power the starter motor, the lights, and the ignition system of a vehicle‟s

engine. This also may describe a traction battery used for the main power source of an electric vehicle.

UAE Trade on Vehicle Batteries in Y 2008

IMPORTS RE-EXPORTS


85071000 Lead-acid electric accumulators(!) 540,685,783 1,486,667 195,855,500 729,548

85072000 Lead-acid electric accumulators(ii), 98,882,052 174,370 6,146,077 14,022

85073000 Nickel-cadmium electric accumulators. 31,085,088 140,181 37,734,888 248,898

85074000 Nickel-iron electric accumulators. 211,193 71 381,650 62

85078000 Electric accumulators, n.e.s. 51,760,920 146,718 6,596,153 2,607

85079000 Parts of electric accumulators. 3,736,475 35,947 483,097 5,393

Total 726,361,511 1,983,954 247,197,365 1,000,530

The imports of all types of accumulators in 2008 were valued at Dhs 726 ml ($198ml/ 2 million in numbers), compared

to Dh 554ml($151ml/ 1.7 million in numbers) in 2007 with an increase of 31%. The growth trend is expected to rise

further in 2009. Imports in 2008 were mainly from South Korea, Indonesia, China, Malaysia, Thailand & India. Re-exports

were mainly to- Middle East & African countries like Iran, Iraq, Saudi Arabia, Lybia, Yemen, Tanzania, Nigeria, Sudan,

Algeria and Cameroon. Re-exports were about 25% in value term.

UAE Trade on Vehicle Batteries in Y 2006-2008 (Ref Annexure-10 for detailed Break-up)

In ml AED 2008 2007 2006 In no of

units 2008 2007 2006

Imports 726.36 553.85 334.91 Imports

1,983,954.00 1,704,628.00 1,740,073.00

Re-exports 247.20 227.13 151.11 Re-exports

1,000,530.00 669,439.00 536,862.00

0,00

100,00

200,00

300,00

400,00

500,00

600,00

700,00

800,00

2008 2007 2006

In m

illio

n A

ED

Imports

Re-exports

0,00

0,50

1,00

1,50

2,00

2,50

2008 2007 2006

Ach

sen

tite

l

Imports

Re-exports

http://en.wikipedia.org/wiki/Rechargeable_battery

http://en.wikipedia.org/wiki/Automobile

http://en.wikipedia.org/wiki/Starter_motor

http://en.wikipedia.org/wiki/Ignition_system

http://en.wikipedia.org/wiki/Internal_combustion_engine

http://en.wikipedia.org/wiki/Traction_battery

http://en.wikipedia.org/wiki/Electric_vehicle

54


Industry Forecast Scenario

2008e 2009f 2010f 2011f 2012f 2013f

Total autos sales(US$bn) 10.38 9.62 9.95 10.75 11.96 13.23

Total autos sales (CBUs) 355,118 324,901 331,606 353,352 387,487 422,145

Total re-exports (US$bn) 2.02 1.72 1.81 2.07 2.28 2.43

Total re-exports (CBUs) 78,876 66,144 68,880 77,759 84,408 88,512

Car ownership (% population0 54.8 55.4 56.2 56.8 57.3 57.9

E Autos Sector -

e/f = estimate/forecast. Sources: Dubai Chamber of Commerce and Industry, UAE Ministry of Planning, UAE Ministry of Interior, BMI

The UAE has become one of the favourite markets for automobile companies around the world, primarily due to the fact that

the Middle East region has been one of the more resilient markets for automobile manufacturers when compared to the North

American and European markets. Before the global economy hit the skids, vehicle numbers were easily outpacing the rate of

population growth. The number of vehicles on the road rose by 49% to 583,015 units in 2008 from 392,546 units in 2006,

according to Gulf News (citing the Abu Dhabi Traffic Department). The growth in the number of vehicles was attributed to the

increase in residents and new companies entering the emirate. In Dubai, the number of registered

vehicles rose to 1.045mn in 2008, up from 853,827 in 2007, Gulf News said.

But the economic downturn has taken a temporary toll on this robust growth. Dealers have reported high levels of unsold stock

and dwindling profit margins this year. According to the Licensing Agency of the Dubai Roads and Transport Authority, there

has been a rapid slowdown in the number of new registered vehicles in the emirate. As reported by Gulf News, new vehicle

registrations in Dubai rose just 4.5% in the first six months of the year, compared to a 17% increase in the year-ago period. In

the first two months of the year, the number of vehicle registrations dropped 3% y-o-y, according to the Vehicles and

Drivers‟ Licensing Department of the Abu Dhabi police. The daily registration rate fell to 500 vehicles,

down from 700-1,000 in 2008.

With 70-80% of UAE sales financed through credit, restrictions on lending have severely hit the market. The government has

put in place policies to stabilize the economy and get credit flowing. According to Bloomberg, it has made approximately

US$32.6bn available to banks in an effort to get them to make financing available to business and consumers. While financing

still remains, for the most part, difficult to come by, there are signs that these efforts are starting to stabilise the market.

In March „09, leading distributor Al-Futtaim announced it was teaming up with banks to provide autos loans to buyers who

wouldn‟t normally be able to qualify for a loan because they don‟t earn enough, the Middle East North Africa - Financial

Network has reported. Around the same time, HSBC Holdings slashed the minimum monthly salary required for consumer and

autos loans in the UAE by 50% to AED10,000, according to published reports.

Along with an improved credit conditions, there are signs that UAE economy overall is on the road to recovery. In August, the

head of the UAE‟s central bank told Al Ittihad newspaper that he expects crude prices to rebound in 2010. As reported by

Emirates Business, he predicted that this would help the economy return to growth. The sharp fall in crude prices in the last

year has been the main source of the decline in Gulf economic growth, and consequently, auto sales. BMI believes that as the

UAE economy gains strength, this will help lay the foundation for a recovery in auto sales.

The credit freeze may be starting to thaw, but credit is trickling down very slowly to the consumer level

and it will some time before the heady days of credit-fuelled buying return - if ever. Still, auto sales are showing some signs of

life. Evidence suggests consumers are paying cash for vehicles in response to aggressive pricing and promotional offers.

Dealers are deeply discounting prices and offering free add-ons in a bid to move stock, making it a buyer‟s market. The

55

luxury segment has been largely unaffected by credit issues, although sales have not been immune from the downturn. In Q109,

BMW Middle East posted a 9% fall in sales. But regional sales and marketing director James Crichton said the

drop was in line with its estimates and that the company remains optimistic about the region‟s growth.

BMI envisages that the premium segment will continue to thrive, even during the downturn, as residents

with high net worth will remain relatively unaffected by the credit crunch. Although, anecdotal evidence

suggests that dealers in the UAE are turning to leasing schemes as customers find it increasingly difficult

to secure loans. The UAE‟s car dealers say that lower-cost cars are the worst performing, although BMI

believes that over the medium term smaller, more economical models will become more popular. At the

present time, consumers who are most likely to purchase vehicles from this segment are holding back purchases, waiting for

further discounts, more favourable credit terms and mindful of the uncertainties in the wider economy.

The market for commercial vehicles is also showing some signs of life. The Department of Transport in Abu Dhabi placed an

order with German autos manufacturer MAN‟s affiliate MAN Nutzfahrzeuge for 400 city and intercity buses. The supply of

250 MAN Lion‟s City low-floor buses and 150 MAN Lion‟s Regio intercity buses started in April‟09.

56

Automotive Products & Free Trade Agreements

Free trade agreements can have important implications for the automotive sector because of the improved access

(addressing both tariff and non-tariff barriers) which they can provide and because of the reduction in tariffs which can

occur under them. Modern agreements typically also cover a wide range of issues other than tariffs and these can be

relevant to trade in automotive products or services. Agreements can provide, for example:

• enhanced cooperation in relation to standards, technical regulations and conformity assessment

procedures;

• disciplines encouraging more efficient customs procedures, including WTO-plus provisions encouraging the

availability of advanced rulings on tariff classification, questions relating to customs valuation, and the origin of

goods;

• commitments to improve access for trade in services;

• commitments to enhance the protection of investments, increase the transparency of investment regimes, and ease

restrictions on Australian investment; and

• commitments to enhance the protection and enforcement of the rights of intellectual property holders.

In UAE all FTAs are conducted on the GCC level, with the exception of FTA with US was on bilateral level and this has

not been signed. The GCC has signed two FTAs, the first one with Singapore last December 2008, and the last one was

with The European Free Trade Association (EFTA) the countries are (Iceland, Liechtenstein, Norway and Switzerland)

signed on the 22nd of June 09. The two FTAs need to be ratified by both sides in order to come into force.

The GCC currently negotiating with the following countries and economic blocks e.g. EU (27 countries), Turkey,

Australia, New Zealand, Mercosur (Argentina, Brazil, Paraguay and Uruguay), Japan, S.Korea, China, India & Pakistan.

All two agreements impose obligations on the parties in relation to trade in automotive products. These

obligations include a general requirement to provide „national treatment‟ to goods originating in the other party (that

is to treat goods originating in the other party no less favourably than like goods originating in UAE in regard to

domestic taxation and regulation). They also include obligations to remove or reduce tariffs in accordance with

agreed schedules and timetables.

57

About Ras Al Khaimah (UAE)

A LOCATION OF CHOICE

With a favourable geographical location at the crossroad of

trade between the East and West, the excellent

infrastructure, strong government support towards the

private sector, and not to mention its unmatched natural

beauty, it is no surprise that the emirate of Ras Al Khaimah

has emerged as a destination of choice for investors and

leisure travellers alike. Ideally positioned to service and

access markets like the Middle East, Africa, the Indian

Subcontinent and the CIS countries, Ras Al Khaimah has

become a growth-driven emirate with an increased focus on

manufacturing, services, real estate, construction and

tourism.

RAK ECONOMY

Ras Al Khaimah, the fourth-largest emirate in the UAE, today boasts of a rapidly growing economy, thanks to the

ambitious process of economic diversification adopted by the government that primarily focuses industry, trade &

commerce, tourism and real estate. While Ras Al Khaimah‟s business-friendly policies have ensured a brisk increase in

foreign direct investments, it has also helped the emirate steadily increase its global appeal as a superior choice

destination for business and leisure.

The natural topography of Ras Al Khaimah which consists of 65 kilometers of sun-kissed sandy beaches, the Al Hajar

Mountain range, the vast desert plains in the central region and the green belt in the southern region, have added to the

success of Ras Al Khaimah as a destination of choice.

Ras Al Khaimah has been witnessing impressive economic growth in the past few years under the visionary leadership

of H.H. Sheikh Saud Bin Saqr Al Qassimi, the Crown Prince & Deputy Ruler of Ras Al Khaimah.

In recent years, Ras Al Khaimah has witnessed an increase in GDP figures with growth in manufacturing, services, and

tourism sectors, along with the increase in foreign trade and per capita income, rise in the standard of living, growth in

education, development in world class housing and health-care facilities among other positive developments that point

towards the all round socio–economic prosperity of Ras Al Khaimah. Ras Al Khaimah was recently rated the best

investment destination by the FDI Magazine, Financial Times, London.

The RAK Government encourages development through private sector and believes that the role of the Government is

primarily to create an optimum environment for enterprises, providing enabling infrastructures, utilities and services and

making sure that the Government is an effective partner- supporting and empowering the private sector.

Ras Al Khaimah has negligible deposits of hydrocarbons unlike some of the other emirates or countries in the GCC. As

a result has sought to diversify its economy over the course of the last decades by opening up to foreign investors and

industries. The aim was to make the best use of the emirate‟s strategic positioning by improving its infrastructure and

creating the right incentives and liberal business environment to attract major industrial enterprises from around the

world.

INFRASTRUCTURE

The Government of Ras Al Khaimah‟s constant endeavor to enhance infrastructure facilities across the emirate has been

a major factor in attracting major foreign investments to Ras Al Khaimah. With a well-planned road network, an

international airport, fully equipped seaports, and advanced communications network, Ras Al Khaimah is well-

positioned for rapid socio-economic growth.

58

RAK INFRASTRUCTURE- Highlights

RAK is well connected to most of the neighboring countries by air, sea and roads

The emirate has an excellent road network making overland trans-shipment

throughout the Middle East a realistic possibility

Excellent telecom system

RAK airport is one of the six international airports in the country

Saqr port in RAK is one of the largest bulk handling ports in the region with

container handling facilities

Although the drive to attract foreign companies has been a recent development, RAK has long been one of the

industrial centres of the UAE. The industrial sector has been dominated by the three main industries of Cement,

Ceramics and Pharmaceuticals. The sector has diversified in the recent years especially since the creation of free

zones as well as partnerships between government and foreign investors.

Ras Al Khaimah has a natural advantage when it comes to

the production of cement as the Al Hajar mountain range

holds vast supplies of high quality limestone, which is a

key raw material for cement manufacturing. The emirate

is also rich in other raw materials such as clay, quartz and

other minerals.

The pharmaceutical industry in RAK is about 30 years

old and has been one of the key focus areas of

government plans since several years. The industry in

RAK is dominated by the Gulf Pharmaceutical

Industries, known as Julphar. The company has grown

into a pharmaceuticals giant by Middle East standards

and now exports to over 80 countries. Julphar is the

biggest pharmaceuticals manufacturer in the UAE.

What RAK lacks in oil is somewhat compensated for by

its natural mineral water resources. RAK is the origin of

Masafi mineral water brand, the region's leading mineral

water brand, with its source lying in several rich

underground springs in the mountainous city of Masafi.

Masafi water, has developed into an international brand

which exports bottled water and fruit juices to more than

20 countries.

RAK Ceramics is the single largest, state-of-the-art, ceramic tile manufacturer in the world with its 12 plants spread

across the UAE, India, Bangladesh, Sudan, Iran and China, producing over one hundred million square meter of tiles

and 3 million pieces of sanitary-ware annually, exporting to 135 countries. The UAE operation is the largest single

location ceramic manufacturing facility in the world with more than 6,000 active models in the ceramic and porcelain

tiles segment, and an exclusive range of more than 600 active models of sanitary ware to offer with a wide choice in

designer bathroom sets, wash basins, bathtubs and related items. RAK Ceramics has diversified horizontally by forming

several joint ventures including Kludi RAK LLC, RAK Porcelain LLC, Laticrete RAK LLC and many more in Ras Al

Khaimah.

RAK INDUSTRIAL ACTIVITIES- Highlights

One of the largest producers of cement in the Gulf region. Al Hajar range of mountains contain high quality limestone deposits.

One of the largest producers of medicines in the UAE (Julphar)

One of the largest producers of ceramic tiles and sanitary ware in the world (RAK Ceramics)

Region’s leading brand of mineral water (Masafi)

Increased industrial activities with the creation of free zones and partnerships between government and foreign investors

Thousands of small and medium scale industries in diversified sectors of manufacturing

Emphasis on high-tech industries

59

About RAK Investment Authority (RAKIA)

The RAK Investment Authority (RAKIA) was

constituted as per Emiri Decree No. (2)/ 2005 issued

by H.H. Sheikh Saqr Bin Mohammed Al Qasimi,

Supreme Council Member and Ruler of Ras Al

Khaimah. The mandate for the authority is to work

towards reinforcing the investment climate in the

emirate and to promote its various economic sectors.

Under the direction of H.H. Sheikh Saud bin Saqr Al

Qasimi, the Crown Prince & Deputy Ruler of Ras Al

Khaimah, we are pursuing the goal of making Ras Al

Khaimah a regional hub for industrial manufacturing,

trade and commerce. The GDP of RAK has grown

significantly over the past few years. The growth is

driven by increased focus on manufacturing, services,

real estate, construction and tourism.

Soon after the formation of RAKIA in the year 2005, RAKIA undertook the development of the industrial parks

which include the free zones and non free zones in the Al Hamra. In the same year the infrastructure and allied work

were started in the Industrial parks which resulted in overall development of industries in the Emirate. In a period of

16 months from RAKIA inception 100% of the Free zone land (2.20 million Sqm) was leased out to 114 companies

and also around 2.2 million sqm were leased out to 94 companies in the non-free zone Industrial area. With the

success in attracting very large conglomerates around the world, RAKIA took the task of developing 25 million sqm

of Industrial land in Al Ghail area of Ras Al Khaimah at the end of year 2006. RAKIA has already licensed over 220

manufacturing companies in Al Ghail Industrial and is self sufficient with a 64 MW of captive power plant. The

strategy of RAKIA is to attract sustainable industries and RAKIA offeres investment advisory services and equity

participation on selected projects. This has resulted in an atmosphere of trust among investors and generated a solid

network of opportunities. As a result of that within a span of 3 to 4 years of its inception, RAKIA has been

instrumental in attracting over US$2.5 billion of industrial investments alone, powering an unprecedented economic

surge that has made Ras Al Khaimah as one of the fastest growing emirates in the UAE and the region.

In response to Ras Al Khaimah‟s growing emergence as a business destination of choice, RAKIA established

RAKOFFSHORE – and the International Business Company (IBC) concept- a move designed to address the growing

demand for offshore markets, and also complementing the emirate's ongoing economic diversification program. RAK

OFFSHORE is an innovative initiative that establishes a true offshore facility and regulatory body providing complete

offshore non-resident business registration and financial services through registered and reputed law firms.

After successfully running industrial parks in Ras Al Khaimah, RAKIA is setting up a Free Industrial zone in Georgia

(Eastern Europe), under the aegis of a subsidiary company of RAKIA. This is the first free zone in the Caucasus

Region and is strategically located for easy access to the EU, Central Asia and Caucasus/ Eastern European markets.

The free zone is being established next to the Poti Sea Port, which is also a subsidiary of RAKIA, the largest sea port

in the Black Sea region and offers tremendous supply chain cost advantage for movement of goods.

RAKIA is now in the expansion mode and has various Strategic Business Units, e.g.

Education/ Technology

Real Estate

Transportation

Investments

Manufacturing & Energy

RAK Offshore

Real Estate Regulatory Authority (RERA).

Vision & Mission

Our vision is to build a diverse economy that enjoys strong, sustainable growth, by attracting investments from the domestic and foreign markets that will create wealth and raise the standard of living for the people of Ras Al Khaimah.

Our mission is to offer complete solutions to the needs of every investor and provide value and customer satisfaction, ensure minimum transaction & conversion cost, enable businesses to flourish in the quickest possible time and to make investment in Ras Al Khaimah simple, easy and a pleasant

experience.

60

RAKIA Milestones- Achievements

Since its inception, over 5200 local and foreign investors

have set up operations within the emirate under RAKIA,

fueling an unprecedented pace of economic growth that has

made Ras Al Khaimah one of the fastest growing emirates

in the UAE and a regional economic force to reckon with.

Out of which over 2300 are registered under RAKIA free

zones and non-free and over 2800 are registered under

RAK Offshore.

No of Licenses under RAKIA Free Zones & Non Free Zones

RAKIA has attracted very strategic companies in diverse

industry segments ranging from glass and table ware, float

glass, vehicle assembly, steel products, building materials,

electrical equipment, rubber, plastics and food processing.

The winning strategy that RAKIA adopted was to forge

partnership with some investors who had viable projects.

This strategic partnership has given the investing companies competitive edge in the way of early implementation,

fund and many functional support. RAKIA continues to have many strategic partners in European countries and also

has its own representative offices in France and Germany. RAKIA has also participated in various events in Europe,

Asia and also in the UAE to show case its investment opportunities to companies looking for investments in UAE and

in the region.

Performance Highlights

5200 local and foreign investors have set up

operations within the emirate under RAKIA. Out of which over 2300 are registered under RAKIA free zones and non-free and over 2800 are registered under RAK Offshore

In RAKIA free zone and non free zone. About 85% of the investors have come from outside UAE

Overall composition of license issued in RAKIA Free Zones & Non Free Zones so far-- Commercial- 24%, Industrial-23%, Consultancy-24%, Trading-19% and Media-10%.

Attracted close to US$ 2.5 billion worth of investments from 95 countries e.g. from the Middle-East including UAE, Indian sub-continent including Pakistan, South-East Asia, US & Europe and other ME countries.

Non-free zone (Industrial zone) Phase-I, II, Extn Zone and Ceramic zone at Al Hamra of total area of 2.83 million sqm have been completely leased out to 94 companies with 90% of these are in manufacturing.

Free Zone at Al Hamra with total area of 2.20 million sqr mtr have been completely leased out to about 114 companies registered in free Zone out of which 89% are in manufacturing.

“Al Ghayl” industrial park, spanning 25 million sq mtr of which 6 million sq mtr is Free Zone. Already 5 million sqm have been leased out to 230 companies so far.

RAKIA ADVANTAGES

Easy licensing procedure

Single window clearance for approvals & permits

Every investor gets personal attention

Ready availability of power

Issue of visit and residence visa under one roof

Open door policy.

Easy access to decision makers.

No of Licenses under RAK Offshore

61

Some of the events that RAKIA participated recently are the Hanover Industrial fair in Germany, Forum for Trade and

Investment in Zurich organized by OSEC, Global India Forum organized by Horasis in Munich to name a few and

many local events like Middle East Manufacturing Exhibition in Abudhabi and also BIG 5 in Dubai apart from

hosting many business delegation in RAK from across the world. RAKIA has been giving importance for a

knowledge based approach with its dedicated team conducting sector analysis and identifying and communicating

with potential large Industrial investors in the target countries. It has in the past forged partnership with prominent

international consulting companies line KPMG, PWC, Financial Times etc. for various studies and opportunity

assessments.

It is evident from the above table that the number of companies registered in RAKIA in Y2009 has increased by over

120% over year 2007, is indicative that the efforts of RAKIA to attract investment to RAK is showing fruitful results.

In the year 2010, RAKIA is expecting to attract large number of Industrial companies as it has already seeing signs of

improvement in many countries after the global economic meltdown during 2008-09.

The licenses RAKIA has issued show a remarkable balance among key sectors – 25 per cent went to commercial

companies, 24 per cent to consultancy and service companies, 23 per cent to industrial firms and the balance to trading

and media companies. Investors have come from 96 countries around the world, out of which 36% are from the Middle

East, 35% from Asia & Far East, 18% from Europe, and the balance from other parts of the world. RAKIA has

experienced considerable increase in the registration of European companies from its previous years. Almost 85% of the

European investments in RAKIA are coming from the six Industrialised countries like Germany, UK, France, Holland,

Switzerland and Austria.

RAKIA through its customer relationship approach has

identified the investors need and has diversified its

product offerings with the introduction of RAKIA

Business Tower, a multi-stored commercial complex

located in the Al Hamra region of RAK that houses

corporate offices of clients from diverse segments.

RAKIA has also developed warehousing facilities to

cater to its growing needs and moreover, workers‟

accommodation and studio flats were also made

available.

Besides managing industrial/business parks, RAKIA

also delivers a wide range of complementary services

to ensure that investment potentials are maximized.

RAKIA offers investment advisory services and equity

participation in selected projects, a key move that

Geographic Trend-Overall

INDIA

28%

ASIA/SE Asia

7%

Europe

18%

UAE

15%

USA

3%

rest of ME

21%

Miscellaneous

6%

Russia/cis

2%

KEY ENABLERS

Good infrastructure & logistic support system

Excellent port facilities

Competitive energy cost

Easy access to GCC countries

Strategic location being near to large and important markets

Zero corruption and minimum bureaucracy

Stable government and investor friendly policies

Presence of local and international banks for project funding

62

reinforces investor trust and confidence. Due to Its

investor-friendly policies and flexibility, brought in an

array of international brands including Guardian Glass,

Arc International, Franke, Duscholux, Mitsui, Kludi,

Becker Industries, Kempe, Ashok Leyland and many

others.

RAKIA is a one stop shop for all the investor needs

providing statutory support like issue of licenses,

assistance in company formation, project approvals,

investor‟s visa, design approvals & construction

permits, occupancy certificates etc.,

Among the myriad of advantages which the foreign investors avail of are full ownership of their businesses and a tax

free haven apart from duty exemptions. Other key benefits offered to investors are 100 per cent capital and profit

repatriation; easy availability of labour; easy licensing procedures; excellent port facilities; and absence of foreign

exchange controls, trade barriers and quotas.

Apart from the above advantages RAK had the unique traits, well differentiated from its competing locations like

excellent terms for leasing, low cost of operations, favorable business environment, friendly government policies and

high quality infrastructure. Because of all these, RAK was rated the „Best Foreign Direct Investment destination in the

Middle East‟ for 2009 by Financial Times London in the year 2007.

RAKIA has signed a memorandum of co-operation with banks in Ras Al Khaimah in a move that will greatly benefit

investors in the emirate. Under the agreement, the banks will provide financing to firms for their projects in RAKIA

industrial parks. S&P affirmed its “A” long-term and “ A-1” short-term sovereign credit ratings on RAK which has

build tremendous confidence for banks as well as investors.

RAKIA's ongoing success largely reflects the Ras Al Khaimah Government's own success in establishing reforms,

instituting new laws and regulations and enforcing policies that are hospitable to local, regional or international

investors.

Major companies in RAKIA

Ashok Leyland of India is one of the biggest names in industry in the automobile industry. The company's integrated

assembly plant is to build 1000 buses per year in RAK has started its operations in the year 2008. This is the first fully

integrated Bus/trck manufacturing in the whole of GCC.

Sector wise break-up- Non free zone Sector wise break-up- Free zone

Electricals

7%

Rubber &

Plastics

7%

Chemicals

9%

Others

17%

Building

materials

22%

Metal

Products

30%

Auto &

Related

2%

Food

processing

2%

Wood

products

4%

Wood

products

6%

Building

materials

11%

Chemicals

11%Others

20%

Metal

Products

36%

Food

processing

2%

Auto &

Related

4% Electricals

4%

Rubber &

Plastics

6%

Accolades for RAK/RAKIA

S&P affirmed its “ A” long-term and “ A-1” short-term sovereign credit ratings to RAK.

Ras Al Khaimah was rated as “Most Cost Efficient FDI Destination” by Financial Times London in the year 2007.

Ras Al Khaimah has been awarded “Most Attractive Destination For FDI” in the 2008 – 2009 Middle Eastern Cities of the Future benchmark rankings

63

Zamil Steel of Saudi Arabia is a strong example of a company based in the Middle East that is starting to establish an

important presence in RAK. Zamil, which is actually one of the largest industrial groups in the Middle East, registered

with RAKIA in 2005. The company manufactures pre-engineered buildings and galvanized steel for electricity towers.

The pre-engineered structures are mainly used for construction projects' show rooms, military bases, factories and

temporary or semi-temporary structures.

Arc International – based in France –

came to RAK in 2004 to establish a

production facility in the region for

easier access to surging Middle Eastern

markets. Arc International is one of the

world's top producers of glassware and

stemware.

Guardian Glass of USA With an initial

investment of approximately $115

million, established Guardian RAK with

a production capacity of 700 tons of

glass per day for use in automotive and

construction applications, including

high-performance coated glass.

Global Glass Solutions has recently set

up a glass processing facility in the Al

Ghail Industrial Park in Ras Al Khaimah.

The state-of-the-art factory is one of the

largest glass-processing facilities in the

region with up to 1,000 sqm glass

processing capacity per day, providing

clients in the region a complete array of

world-class solutions for their processed

glass requirements. The facility will

manufacture all kinds of processing glass

and will initially cater to markets in the

UAE and the rest of the GCC.

RAK Steel, a joint venture of Ras Al Khaimah Investment Authority,is a new energy efficient and environment

friendly steel rolling mills. The mill produces 500,000 tonnes per annum 8mm to 40 mm diameter „steel deformed

reinforcement bars (REBARS) to international British and American standards.

JBF Industries has teamed up with Ras Al Khaimah Investment Authority in its initial stages and set up Polyster PET

Resin Packaging chips plant in RAKIA. The cost of the plant would be around $100 million.

Naturelle LLC – Dabur International Subsidiary

Naturelle LLC, subsidiary of Dabur International Ltd., has started its production in RAK in the year 2008. Dabur

India Limited is one of the leading FMCG Companies in India, with interests in health care, personal care products,

with powerful brands like Dabur Amla, Dabur Chyawanprash, Vatika, Hajmola & Real.

Maico Gulf LLC

Maico Gulf LLC, a reputed company in air ventilation systems has set up its manufacturing unit in Al Ghail Industrial

Park. Maico Gulf LLC is a joint venture company between Maico Holding GmbH of Germany and Hira Holding BVI.

The Maico products include Ventilation Fans, Industrial & Jet Fan, Smoke vents and Air Handling Units.

NAME SECTOR COUNTRY

INVESTMENT Million USD YEAR

KEC Cables Industrial Cables India 60 2009

Pikko Steel Connectors Finland 10 2009

POSCO Steel South Korea 35 2008

Becker Paints Paints Manufacturing France 20 2008

Novas Sealing Industrial Gaskets UK 10 2008

Kludi RAK Water Taps & Faucets Germany 30 2007

Kempe Engineering Industrial Equipments Australia 10 2007

Guardian Industries Float Glass USA 130 2006

Franke SS Kitchen Product Austria 55 2006

Ashok Layland Bus & Truck Assembly India 50 2006

Kirby Steel Steel Kuwait 30 2006

Dabur India Herbal Products India 25 2006

RAK Ghani Glass Glass Containers Pakistan 25 2006

RAK Steel Steel Products India 25 2006

Mitsui Japan Heavy Fabrication Japan 150 2005

JBF RAK Polyester Chips & Films India 100 2005

Falcon International Blue Ray DVD Switzerland 70 2005

Zamil Steel Steel KSA 35 2005

Duscholux Sanitaryware Fittings Germany 30 2005

Pioneer Cements Cement India 105 2005

Arc International Tableware France 100 2004

Global Glass Solution Glass mfg Jordan 30 2009

Maico Gulf Ventilation system Germany -- 2009

http://www.dabur.com/EN/Products/Health_Care/

http://www.dabur.com/EN/Products/Personal_Care/

http://www.dabur.com/EN/Products/Personal_Care/Hair_Care/Amla/

http://www.dabur.com/en/products/Health_Care/Health_Supplements/Chyawanprash/

http://www.dabur.com/EN/Products/Personal_Care/Hair_Care/Vatika/

http://www.dabur.com/en/products/Health_Care/Digestive/hajmola/

http://www.dabur.com/EN/Group/Foods/real/

64

References

1. Hiromi Oki, “Where intra-regional trade in East Asia is heading”, JETRO Research Paper Vol. 06, 2008,

2. Changing Features of the Automobile Industry in Asia - Asia-Pacific Research and Training Network on Trade

Working Paper Series, No. 37, July 2007

3. Dubai Chamber of Commerce Economic Bulletin, vol-4, issue-35, May 2007

4. OICA Statistics on global motor vehicles production

5. Trade Statistics-2008, Dubai Port & Customs, Dubai World

6. BMI report on UAE‟s Auto sector 2009

7. GOIC report on sector study on Automotive Industry in GCC 2009

8. Dubai Chamber of Commerce Economic Bulletin, vol-4, issue-35, May 2007

9. Dow Jones Factiva database of compaies.

Websites:

http://www.researchandmarkets.com/reports/

http://www.worldbank.org

http://www.unido.org

http://www.gulfnews.org

http://www.khaleejtimes.org

http://www.worldbank.org/

http://www.unido.org/

http://www.gulfnews.org/

http://www.khaleejtimes.org/

65

Annexure-I World Motor Vehicle Production By Country And Type In 2008 Source: OICA Statistics

Country Cars

Commercial vehicles

Total % change

Argentina 399,577 197,509 597,086 9.60%

Australia 285,590 43,966 329,556 -1.50%

Austria 125,436 25,441 150,877 -33.80%

Belgium 680,131 44,367 724,498 -13.20%

Brazil 2,561,496 658,979 3,220,475 8.20%

Canada 1,195,436 882,153 2,077,589 -19.40%

China 6,737,745 2,607,356 9,345,101 5.20%

Czech Rep. 933,312 12,510 945,822 0.90%

Egypt 72,485 42,297 114,782 9.90%

Finland 18,000 376 18,376 -24.40%

France 2,145,935 423,043 2,568,978 -14.80%

Germany 5,526,882 513,700 6,040,582 -2.80%

Hungary 342,359 3,696 346,055 18.50%

India 1,829,677 484,985 2,314,662 2.70%

Indonesia 431,423 169,421 600,844 46.00%

Iran 940,870 110,560 1,051,430 5.40%

Italy 659,221 364,553 1,023,774 -20.30%

Japan 9,916,149 1,647,480 11,563,629 -0.30%

Malaysia 419,963 110,847 530,810 20.20%

Mexico 1,241,288 949,942 2,191,230 4.60%

Netherlands 59,223 73,271 132,494 -4.40%

Poland 840,000 110,908 950,908 20.00%

Portugal 132,242 42,913 175,155 -0.60%

Romania 231,056 14,252 245,308 1.50%

Russia 1,469,429 320,872 1,790,301 7.80%

Serbia 9,818 1,810 11,628 17.40%

Slovakia 575,776 0 575,776 0.80%

Slovenia 180,233 17,610 197,843 -0.30%

South Africa 321,124 241,841 562,965 5.30%

South Korea 3,450,478 356,204 3,806,682 -6.80%

Spain 1,943,049 598,595 2,541,644 -12.00%

Sweden 252,287 56,747 309,034 -15.60%

Taiwan 138,709 44,260 182,969 -35.40%

Thailand 401,309 992,433 1,393,742 8.30%

Turkey 621,567 525,543 1,147,110 4.30%

Ukraine 400,799 22,328 423,127 5.10%

UK 1,446,619 202,896 1,649,515 -5.80%

USA 3,776,358 4,928,881 8,705,239 -19.30%

Uzbek 195,038 13,000 208,038 12.50%

others 332,917 170,993 503,910 -15.80%

Total 52,637,206 17,889,325 70,526,531 -3.70%

66

Annexure-II World Ranking Of Vehicle Manufacturers In 2008 Source: OICA Statistics

Rank GROUP Total CARS LCV HCV

HEAVY

BUS

Total 69,561,356 55,846,163 10,652,432 2,598,495 464,266

1 TOYOTA 9,237,780 7,768,633 1,102,502 251,768 114,877

2 GM 8,282,803 6,015,257 2,229,833 24,842 12,871

3 VOLKSWAGEN 6,437,414 6,110,115 271,273 46,186 9,840

4 FORD 5,407,000 3,346,561 1,991,724 68,715

5 HONDA 3,912,700 3,878,940 33,760

6 NISSAN 3,395,065 2,788,632 463,984 134,033 8,416

7 PSA 3,325,407 2,840,884 484,523

8 HYUNDAI 2,777,137 2,435,471 85,133 151,759 104,774

9 SUZUKI 2,623,567 2,306,435 317,132

10 FIAT 2,524,325 1,849,200 516,164 135,658 23,303

11 RENAULT 2,417,351 2,048,422 368,929

12 DAIMLER AG 2,174,299 1,380,091 330,507 395,123 68,578

13 CHRYSLER 1,893,068 529,458 1,356,610 7,000

14 B.M.W. 1,439,918 1,439,918

15 KIA 1,395,324 1,310,821 83,159 1,344

16 MAZDA 1,349,274 1,241,218 105,754 2,302

17 MITSUBISHI 1,309,231 1,175,431 128,233 5,567

18 AVTOVAZ 801,563 801,563

19 TATA 798,265 489,742 160,966 128,169 19,388

20 FAW 637,720 637,720

21 FUJI 616,497 552,096 64,401

22 ISUZU 538,810 47,101 488,488 3,221

23 CHANA AUTOMOBILE 531,149 531,149

24 DONGFENG 489,266 489,266

25 BEIJING AUTOMOTIVE 446,680 446,680

26 CHERY 350,560 350,560

27 SAIC 282,003 282,003

28 VOLVO 248,991 17,964 218,542 12,485

29 BRILLIANCE 241,553 241,553

30 HARBIN HAFEI 226,754 226,754

31 GEELY 220,955 220,955

32 ANHUI JIANGHUAI 207,711 207,711

33 BYD 192,971 192,971

34 GAZ 187,053 22,043 140,985 24,025

35 MAHINDRA 162,816 100,615 62,201

36 PROTON 157,306 156,813 493

37 GREAT WALL 129,651 129,651

38 PACCAR 125,084 125,084

39 CHONGQING LIFAN 122,783 122,783

40 M.A.N. 108,053 100,566 7,487

41 JIANGXI CHANGHE 107,422 107,422

42 CHINA NATIONAL 106,377 106,377

43 PORSCHE 96,721 96,721

44 LUAZ 90,548 88,316 2,232

45 NAVISTAR 90,264 76,302 13,962

46 SCANIA 79,874 72,067 7,807

47 SHANNXI AUTO 75,220 75,220

48 UAZ 72,181 30,953 41,228

49 ASHOK LEYLAND 71,485 1,019 50,539 19,927

50 KUOZUI 67,891 63,827 1,792 2,272

67

Annexure-III UAE Imports & Re-exports of Vehicles in 2008 & 2007 in value & Number of units Source- Dubai Port & Customs(Dubai World)

Y-2008 Imports


Car 26,818,609,248 408,903


Motor Vehicle for Transport of Goods 4085,191,976 50,462

Grand Total 33,715,713,151 475,567

Re-exports


Car 6,660,332,310 136,168



Grand Total 8,393,202,038 161,041

Y-2007 Imports


Car 22,085,635,576 450,325



Grand Total 27,017,622,902 542,141

Re-exports


Car 4,936,000,803 113,362



Grand Total 6,192,020,288 136,784

68

Annexure-IV Auto component Manufacturers in GCC Source: GOIC report on GCC Autosector 2009

SI. No Company Name

Business activity Location Address Phone

1 Gulf Exhaust Exhaust Bahrain- Maameer

Factory 107, Road 3402, Maameer 634

97317701126

2 National Automobile Industry Co

Assembly KSA- Jeddah PO Box 5938, Jeddah 21432

+96626822000

3 Arabian Axles, Foundries and Spare parts Co

Axles KSA-Dammam PO Box 8491,2nd ind city, Dammam 31482

009663 812 1267/1147 Ext:116

4 Rezayat Friction Co Ltd Brakes KSA-Dammam PO Box 90, Al Khobar 31952

00966-3-8140363 / 0362

5 Saudi Germany BrakeShoes manufacturing Co Ltd

Brakes KSA-Jeddah PO Box 42221, Jeddah 21541

00966 26080783

6 Akam Brake production factory

Brakes KSA- Riyadh PO Box 42004, Riyadh 11541

00966 1 4466624

7 Al Saraha Car Bodies Factory

Chassis KSA-Dammam Hassa

PO Box 5356, Hassa 31982

5966 848

8 Arabic Car Bodies Factory Chassis KSA-Dammam, Seihat

PO Box 14044, Dammam 31424

Factory- 9663 837 1968, office-8203353

9 Modern steel Fabrication & Exhaust factory

Exhaust, shock absorber

KSA-Dammam PO Box 1963, Dammam 31441

00966 3 847 1350

10 Otaibi Silencer Factory Exhaust, shock absorber

KSA-Dammam PO Box 294, Dammam 31411

00966 38472815

11 Saudi Exhaust System Co Exhaust, shock absorber

KSA-Jeddah PO Box 10873, Jeddah 21443

00966 2 6379281

12 Alkamil Mufflers Factory Exhausts, Mufflers

KSA-Jeddah-Taif PO Box 147, Jeddah 21944

966 2 7440736

13 Saudi Filter Industry Company

Filters KSA- Dammam PO Box 31872, 2nd Industrial City, Al-Khobar 31952

00966 3812 1184 Extn 223

14 Al Mutlaq Filters Co Filters KSA-Jeddah PO Box 2076,Industrial Estate, Phase#2,Jeddah

009662 636 9317

15 Al Nahdi Spare parts & Foundries & Filters

Filters KSA-Jeddah PO Box 22287, Jeddah 21495

00966 2 650 4745

16 Desert Filters Factory Filters KSA-Riyadh PO Box 120, Riyadh 11383

009661 265 0567

17 Saudi American cars Spare parts Industry

Gear box KSA- Riyadh PO Box 7315, Riyadh 11642

009661 422 0243

18 Technoglass Co Glass KSA-Jeddah PO Box 32013, Jeddah 21428

00966 2 637 9909

19 National Glass & Mirrors Ltd

Glass KSA- Jeddah PO Box 32226, Jeddah 21426

9662 608 1320, 6377124, 6378637

20 Saudi Lamino Ltd Glass KSA-Riyadh PO Box 43130, Riyadh 11561

9661 2652325

21 Car Seat & Cushion Factory Co

Interior KSA- Riyadh PO Box 171, Riyadh 11383

966 1 242 9225

69

SI. No

Company Name Business activity

Location Address Phone

22 Sasco Renewing Engine &Car Water Pumps Factory

Pumps KSA-Riyadh PO Box 51880, Riyadh 11553

463 0722

23 Al Nahda Radiator factory Radiators KSA-Dammam PO Box 121, 1st Ind. City, Dammam

8571618/84 71472

24 National Radiator Factory Radiators KSA- Dammam PO Box 2464, Dammam 31952

966 38220679

25 Zaid Md Drawaish & Partner Radiator Factory

Radiators KSA-Dammam PO Box 7835, 2nd Ind. City, Dammam

009663 834 8559

26 Al Aman For Radiator Factory

Radiators KSA-Dammam Hafouf

PO Box 98, Hafouf 31982

9663 5864500

27 Gulf Radiator Factory Radiators KSA-Jeddah PO Box 124929, Jeddah 21342

00966 2635 2590

28 El Salama Radiator Factory

Radiators, brakes

KSA-Dammam PO Box 1043, 1St Ind city, Dammam

00966 3 828 3205/6/3

29 Al Fawzan Radiator Factory

Radiators, brakes

KSA- Riyadh PO Box 41411, Riyadh 11521

009661 448 0612

30 Rifai Glass Glass Kuwait-Safat PO Box 1941, Kuwait 13020

(+965) 24817162- 24843719-

31 Reem Batteries & Power Appliance con SAOG

Glass Oman PO Box 123, Rusail Tel.: (968) 2444 6191/92/93

32 Oman Filters Industry Co Filters Oman- Rusail PO Box 45, Rusail 124 00968 626 420/21

33 Sea Shore Car Bodies and Chassis Factory

Chasis Qatar- Al Khor PO Box 60100, Al Khor 00974 472 2843/44

34 Nemeh Enterprises Radiators, brakes

Qatar-Ind. Area Doha

PO Box 3410, Doha 4607 962

35 National Radiator Factory WLL(Nemeh Enterprises

Radiators, brakes

Qatar- Ind. Area Doha

PO Box 99, Doha 4114782/43 76922

36 Al Khaleej Car Exhaust factory

Exhaust UAE- Dubai PO Box 1162, Dubai 8801203

37 Skyline Exhaust Industry LLC

Exhaust UAE- Dubai PO Box 3710, Dubai 97143389775

38 Consolidated Filters Industry LLC

Filters UAE- Dubai PO Box 26322, Dubai 3472221

39 Gulf Filters Establishment Filters UAE- Musafah PO Box 2175, Abu Dhabi

5554300/55 43393

40 Reliable Fabricators LLC Fuel injectors UAE-Dubai PO Box 16648, Dubai 9714333 2399

41 Gulf Engineering & Heavy Car Body Factory

Fuel tank UAE- Al Ain PO Box 18099, 9713782 4450

42 Lumi Glass Industry Glass UAE- Dubai, Alquz, P.O. Box;113744 9714 340 3919

43 National Finland Auto Glass

Glass UAE- Umm Al Quwain

44 Wellfit Co interior UAE- Ajman PO Box 20767, Ajman 9716743 7012

45 Dolphin Industrial Ltd Radiators UAE-Ajman PO Box 20678, Ajman 9716743 2565

46 International Radiators Industry

Radiators UAE-Sharjah PO Box 388, Sharjah 9716 5344999

47 Sabah Car Radiator Industry

Radiators UAE-Sharjah PO Box 44,Sharjah 9716 5341926

48 Serck Services-Gulf ltd Radiators UAE-Sharjah PO Box 5834,Sharjah 9716558 2607

49 Automotive Ancillaries Ltd Spring UAE-Dubai PO Box 16755, Dubai 8816645

50 Al Baqa Mechanical & Eng. CO Ltd

Spring UAE- Ajman PO Box 1546, Ajman 9716 7435942

51 Aswan International Engineering Co LLC

Valves UAE-Dubai PO Box 31550,Dubai 8851300

52 Dolphin Brake linings UAE 971-6-7432565

70

Annexure-V-A UAE Imports & Re-exports of Parts and Accessories in 2006, 07 & 08 in value term Source- Dubai Port & Customs(Dubai World)

Table- Imports


ml AED ml AED ml AED

87081000 Bumpers & parts 251.12 142.68 78.55






87084000 Gear boxes 71.61 56.34 40.26




87089100 Radiators 65.20 51.66 40.23


87089300 Clutches & parts 441.09 502.78 228.04


87089500 Safety airbags 6.55 0.05 0.00


Total 10,389.97 8,867.91 6,591.61

Table- Re-exports


ml AED ml AED ml AED

87081000 Bumpers & parts 58.96 48.96 26.28






87084000 Gear boxes 13.35 25.48 15.89




87089100 Radiators 17.22 68.65 46.66


87089300 Clutches & parts 108.73 128.75 78.92


87089500 Safety airbags 0.62 0.01 0.00


4,206.72 3,693.54 2,487.77

71

Annexure-VB UAE Imports & Re-exports of Parts and Accessories in 2006, 07 & 08 in no of units (Source- Dubai Port & Customs(Dubai World)

Table- Imports


87081000 Bumpers & parts 790,993 205,650 210,030

87082100 Safety seat belts 34,606 162,357 247,485

87082910 Luggage carriers 57,820 53,912 39,083

87083000 Brakes and servo-brakes 1,743,193 10,396 0

87083100 Mounted brake linings 3,612 98,944 73,550

87083900 Brakes & servo-brakes & parts-II 21,558 537,965 445,730

87084000 Gear boxes 154,678 49,022 20,354

87085000 Drive-axles with differential, 771,396 21,011 10,002

87087000 Road wheels & parts & accessories 2,889,040 1,385,680 1,051,517

87088000 Suspension shock-absorbers 1,169,773 410,777 508,149

87089100 Radiators 369,700 119,072 94,541

87089200 Silencers & exhaust pipes 115,346 71,800 46,849

87089300 Clutches & parts 1,835,596 394,930 338,029

87089400 Steering wheels, columns & boxes 193,487 71,948 70,168

87089500 Safety airbags 20,572 10 0

87089900 Parts & accessories of vehicle body 30,309,298 5,606,998 3,684,515

40,480,668 9,244,910 6,861,373

Table- Re-exports


87081000 Bumpers & parts 175,947 21700 29,332

87082100 Safety seat belts 430,409 2136 46676

87082910 Luggage carriers 6,764 2675 9411

87083000 Brakes and servo-brakes 54,364 125,067 0

87083100 Mounted brake linings 603 5,702 14,199

87083900 Brakes & servo-brakes & parts-II 23,117 15,192 75091

87084000 Gear boxes 24,570 72,717 6335

87085000 Drive-axles with differential, 39,001 25,631 5,225

87087000 Road wheels & parts & accessories 536,184 191462 262,776

87088000 Suspension shock-absorbers 194,847 266,495 113710

87089100 Radiators 107,738 190,185 77,448

87089200 Silencers & exhaust pipes 78,261 5,745,781 7025

87089300 Clutches & parts 562,674 29,504 94577

87089400 Steering wheels, columns & boxes 497,625 143,086 7,022

87089500 Safety airbags 458 12 0

87089900 Parts & accessories of vehicle body 28,208,085 3,151,127 2326588

30,940,647 9,988,472 3,075,415

72

Annexure-VI-A UAE Trade On Tyre & Tyre Products-2008 Source- Dubai Port & Customs(Dubai World)

IMPORT RE-EXPORT

NEW PNEUMATIC TYRES

Value (AED) Units

Value (AED) Units of a kind used on motor cars (including station wagons & racing cars).

1853365027 9636233

1324694809 4898306

of a kind used on buses & lorries.

1190378134 2198087

284566493 565151

of a kind used on aircraft.

34923969 9062

4738330 1054

of a kind used on motorcycles.

9795180 153801

7603778 37086

of a kind used on bicycles.

14,681,597 118,722

9,071,693 44,959

of a kind used on argricultural or forestry vehicles

22,579,890 100,365

71,065 405

of a kind used on construction or industrial handling vehicles < 61 cm

47,346,029 50,155

2,678,296 13,644

of a kind used on construction or industrial handling vehicles>61 cm

9,167,141 4,520

1,179,262 225

of a kind used on agricultural or foresty vehicles & machines.

969519 5193

247606 603

having a herring-bone" or similar tread, n.e.s.

3,170,660 11,167

1,147,181 3,444

of a kind used on agricultural or forestry vehicles & machines

54,418,049 21,847 8,757,438 146,936

ew pneumatic tyres of rubber, n.e.s.

95787325 448235

58258875 159414

SUB-TOTAL

3,336,582,520 12,757,387

1,703,014,826 5,871,227

RETREATED TYRES

of a kind used on motor cars (including station wagons & racing cars)

633119 2701

2711137 19571

of a kind used on buses or lorries.

3726889 20852

645368 250


4,670,578 1,707

6,246,604 1,010

Others

550,244 1,140

222,875 128

SUB-TOTAL

9,580,830 26,400

9,825,984 20,959


Used pneumatic tyres, of rubber

199842 3702

12043841 268279

TYRE TREADS AND TYRE FLAPS

Solid or cushion tyres, tyre treads & tyre flaps, of rubber

11,952,010 135,866

2,098,940 1,902

INNER TUBES

For motor cars buses or lorries.

88229683 531643

40286988 206381

For bicycles.

11836720 692572

5121461 622739

16855195 135604

10736405 55839

SUB-TOTAL

116921598 1359819

56144854 884959

TOTAL

3,475,236,800 14,283,174

1,783,128,445 7,047,326 Source- Dubai port & customs, Dubai World

73

Annexure-VI-B UAE Trade On Tyre & Tyre Products-2007 Source- Dubai Port & Customs(Dubai World)

IMPORT RE-EXPORT

NEW PNEUMATIC TYRES

Value(AED) Unit

Value(AED) Unit

of a kind used on motor cars (including station wagons &

racing cars).

1382503324 8439240

1260471315 4629483

of a kind used on buses & lorries.

1111091646 2614907

404045338 1323997


17529785 9640

5602363 5360

of a kind used on motorcycles.

7617082 57483

9265834 46425

of a kind used on bicycles.

15,405,549 80,598

7,360,456 14,083

of a kind used on argricultural or forestry vehicles

16602029 65806

271193 195

of a kind used on construction or industrial handling

vehicles < 61 cm

12096654 34443

2916918 7563


vehicles > 61 cm

21,532,173 13,661

111,808 117

having a "herring-bone" or similar tread, n.e.s.

1688460 1165

208195 47

of a kind used on agricultural or foresty vehicles &

machines.

3,672,028 21,834

1,274,758 6,697


vehicles < 61 cm.

16,044,455 36,624

5,893,978 1,357


vehicles > 61 cm.

33,403,103 10,971

4,475,423 4,559

New pneumatic tyres of rubber, n.e.s.

58265503 208821

47336695 65397

SUB-TOTAL

2,697,451,791 11,595,193

1,749,234,274 6,105,280

RETREATED TYRES of a kind used on motor cars (including station wagons &

racing cars)

865890 3746

6410729 1819

of a kind used on buses or lorries.

5322149 26467

1816104 1570


4,372,001 2,396

2,499,150 638

Other

478971 1599

468865 2583

SUB-TOTAL

11,039,011 34,208

11,194,848 6,610


Used pneumatic tyres, of rubber.

427123 4415

14687184 27251

TYRE TREADS AND TYRE FLAPS

Solid or cushion tyres, tyre treads & tyre flaps, of rubber.

11389461 48330

2149187 2728

INNER TUBES

For motor cars, buses or lorries.

56177100 418678

23376127 54742

For bicycles

8076551 68390

2759298 8055

Other

2,370,762 23,116

5,896,957 38,893

SUB-TOTAL

66,624,413 510,184

32,032,382 101,690

Total

2,786,931,799 12,192,330

1,809,297,875 6,243,559

Source- Dubai port & customs, Dubai World

74

Annexure-VII Key Global Tyre Manufacrurers Contact Details

Company Contact Information

Bridgestone Shoshi ARAKAWA, Chairman of the Board , 10-1 Kyobashi 1-chome, Chuo-ku, Tokyo, 104-8340, Japan, Tel- 81 3 35636822/ 81-3-3535-2553

Michelin Chairman Supervisory Board: Éric Bourdais de CharbonnièreCompagnie Générale des Établissements Michelin, 23, place des Carmes-Déchaux, 63040 Clermont-Ferrand, France, Tel. +33-4-73-32-20-00/ Fax +33-45-66-15-53

Goodyear Chairman, President, and CEO: Robert J. (Bob) Keegan, The Goodyear Tire & Rubber Company, 1144 E. Market St.Akron, OH 44316-0001,OH, USA, Tel. 330-796-2121/ Fax 330-796-2222

Continental Elmar Degenhart (CEO and Chairman of the executive board), Continental AG, Vahrenwalder Strasse 9, D-30165 Hannover, Germany, Tel. +49-511-938-01/ Fax +49-511-938-81-770

Sumitomo Rubber Mitsuaki Asai, Chairman, Sumitomo Rubber Industries, Ltd.3-6-9 Wakihama-cho, Chuo-ku, Kobe 651-0072, Japan Tel. +81-78-265-3004/ Fax +81-78-265-3113

Toyo Tire & Rubber Kenji Nakakura, President & CEO, Toyo Tire & Rubber Co., Ltd., 1-17-18 Edobori, Nishi-ku, Osaka 550-8661, Japan Tel. +81-6-6441-8801/ Fax +81-6-6446-2225

Yokohama Tadanobu Nagumo, President and Representative Director, The Yokohama Rubber Co., Ltd. 36-11, Shimbashi 5-chome, Minato-ku, Tokyo 105-8685, Japan, Tel. +81-3-5400-4531/ Fax +81-3-5400-4570

Kumho Jong Ho Klm, President and CEO, Kumho Tires Co Inc, 555, Schon-dong, Gwangsan-gu, Guangju, Korea, TEL- 062-9402114/ 82-2-6303-8297

Hankook Cho Yang-Rai , Chairman, Hankook Tire Co., Ltd. 647-15 Yeoksam-dong, Gangnam-gu, Seoul 135-723, South Korea Tel. +82-2-2222-1000/ Fax +82-2-2222-1100

Cooper Roy V. Armes, Chairman, President, Cooper Tire & Rubber Company, 701 Lima Ave., Findlay, OH 45840, OH , USA Tel. 419-423-1321, Toll Free 800-854-6288, Fax 419-424-4212

Nokian Henrik Therman, Chairman, Nokian Tyres plc, Pirkkalaistie 7, FIN-37101 Nokia, Finland, Tel. +358-10-401-7000/ Fax +358-10-401-7799

GT Radial Dr Enki Tan, Chairman, No.280-2,linhong Road, Changning District, Shanghai 200335,P.R.China Tel- (86-21) 2207 3333/ Fax- (86-21) 2207 3000

CEAT R. P. Goenka, Chairman, CEAT Limited, CEAT Mahal, 463, Dr Annie Besant Road, Worli, Mumbai -

400 030 Telephone: +91 22 2493 0621/ Fax: +91 22 2493 8933

MRF MRF Limited, 124, Greams Road, Chennai - 600 006, India. Phone : 91 - 44 – 28292777/ Fax : 91 - 44 - 2829 1844 / 0562

Apollo Onkar S Kanwar (CMD), Apollo Tyres Limited, Apollo House, 7 Institutional Area, Sector 32,

Gurgaon 122001 , Haryana, India Tel: +91 124 2721000/ Fax- 91 124 2721000

JK Tyre H.S.Singhania, Chairman, JK Tyre and Industries Ltd. Link House,, Bahadurshah Zafar Marg, New Delhi - 110 002 Tel-91-11-23311112-7/ Fax- 91-11-23322059

Pirelli Marco Tronchetti Provera (Chairman of the board and CEO),, Pirelli Group, Viale Sarca, 222 Pirelli & C. S.p.A 20126 Milano, Tel- +39 02 64421/ +39 02 6442 2670

http://www.answers.com/topic/chief-executive-officer

http://www.answers.com/topic/r-p-goenka

http://www.answers.com/topic/marco-tronchetti-provera-1

http://www.answers.com/topic/chair-official

http://www.answers.com/topic/board-of-directors

http://www.answers.com/topic/chief-executive-officer

75

Annexure-VIII UAE Trade On Vehicle Battery (Accumulators)-2006-2008 Source- Dubai Port & Customs(Dubai World)

YEAR-2008 IMPORTS RE-EXPORTS


85071000 Lead-acid electric accumulators 540,685,783 1,486,667 195,855,500 729,548

85072000 Lead-acid electric accumulators, 98,882,052 174,370 6,146,077 14,022

85073000 Nickel-cadmium electric accumulators. 31,085,088 140,181 37,734,888 248,898

85074000 Nickel-iron electric accumulators. 211,193 71 381,650 62

85078000 Electric accumulators, n.e.s. 51,760,920 146,718 6,596,153 2,607

85079000 Parts of electric accumulators. 3,736,475 35,947 483,097 5,393

Total 726,361,511 1,983,954 247,197,365 1,000,530

YEAR-2007

HS Code

: HS Code Description : Value(AED) Unit Value(AED) Unit

85071000 Lead-acid electric accumulators 447973827 1330067 198792553 648740


85073000 Nickel-cadmium electric accumulators. 15745827 182782 14497591 3608

85074000 Nickel-iron electric accumulators. 81864 878 152967 1469

85078000 Electric accumulators, n.e.s. 27462288 70435 11010986 3921

85079000 Parts of electric accumulators. 7843938 18515 584591 3997

Total 553,851,425 1,704,628 227,130,737 669,439

YEAR-2006

HS Code



85072000 Lead-acid electric accumulators, 34952404 78544 2716978 15272

85073000 Nickel-cadmium electric accumulators. 20118595 178373 10528256 7113

85074000 Nickel-iron electric accumulators. 337725 1634 134328 1553

85078000 Electric accumulators, n.e.s. 23279397 71290 10452681 19870

85079000 Parts of electric accumulators. 4295687 193063 654809 6732

Total 334,912,623 1,740,073 151,111,452 536,862

76

Annexure-IX UAE Trade On Electrical Ignition system - 2006-2008 Source- Dubai Port & Customs(Dubai World)

Year-2008


85111000 Sparking plugs. 65,783,493 2,410,352 24,946,131 25,039

85112000 Ignition magnetos; magneto-dynamos;etc 206,981 1,052 596,664 1,656

85113000 Distributors; ignition coils. 10,374,531 47,824 2,240,557 4,961


85115000 Generators for internal combustion engines, n.e.s. 30,529,240 58,876 35,581,344 16,917

85118000 Electrical ignition or starting equipment 7,437,748 44,770 2,909,280 2,936

85119000 Parts of electrical ignition or starting equipment 21,460,893 115,850 7,391,844 9,076

Total 159,070,662 2,705,667 84,477,320 73,211

Year-2007

HS Code


85111000 Sparking plugs. 46915241 48616 22420671 26984

85112000 Ignition magnetos; magneto-dynamos;etc 2781649 3492 1342357 1981

85113000 Distributors; ignition coils. 6199984 18272 969775 1260

85114000 Starter motors & dual purpose starter-generators. 13970749 33556 6163814 10657

85115000 Generators for internal combustion engines, n.e.s. 20271941 32638 17539776 10187

85118000 Electrical ignition or starting equipment 7301082 17865 1792090 946

85119000 Parts of electrical ignition or starting equipment 19707847 45665 7889298 5275

Total 117148493 200104 58117781 57290

Year-2006

HS Code


85111000 Sparking plugs. 33041892 360992 17130059 27584

85112000 Ignition magnetos; magneto-dynamos;etc 409,348 432 82,662 193

85113000 Distributors; ignition coils. 11315771 14780 1492687 3836


85115000 Generators for internal combustion engines, n.e.s. 18722176 29643 14410455 16017

85118000 Electrical ignition or starting equipment 6684512 21062 1199042 1044

85119000 Parts of electrical ignition or starting equipment 20683080 49436 7953729 12904

Total 109602708 505209 47014278 68216

77

Annexure-X UAE Auto Dealers

Company Brand Coverage area

AGMC BMW, MINI, Alpina UAE

Al-Futtaim Toyota Motor, Lexus UAE

Al Ghandi Auto Fiat, Proton, Chevrolet, General Motors Dubai, Sharjah

Al Habtoor Motors Mitsubishi Motors, Galloper UAE

Al Khoory Automobiles Subaru Dubai, Northern Emirates

Al Majid Motors Kia Motors, Renault UAE

Al Nabooda Automobiles Volkswagen, Porsche, Audi UAE

Ford Motor*, Rover, Range Rover, Jaguar Cars,

Al Tayer Motors Ferrari, Maserati UAE

Al Yousuf Motors GM Daewoo Auto & Technology, Daihatsu Motor UAE

Arabian Automobiles Nissan Motor, Renault Dubai and Northern Emirates

Autostar Trading Škoda Auto UAE

Bin Dhahir Motors SEAT UAE

Galadari Automobiles Mazda Motor, Mahindra & Mahindra, Bajaj Tempo UAE

Gargash Motors Mercedes-Benz Dubai, Northern Emirates

Genavco Isuzu Motors UAE

Al Jazira Motors Lamborghini UAE

Juma Al Majid Est Hyundai UAE

Liberty Automobiles Cadillac, Hummer, Opel‡, Chevrolet

§ UAE

Nadoo Motors Pudmani, LDV UAE

National Auto General Motors‡, SsangYong Motor UAE

Swaidan Trading Peugeot‡ UAE

Trading Enterprises Jeep+, Honda Motor, Chrysler, Volvo Cars, Dodge UAE

Abu Dhabi Motors BMW Abu Dhabi

Al Masaood Automobiles Nissan Motor Abu Dhabi

Ali and Sons Motors Porsche, Volkswagen, Audi Abu Dhabi and Al Ain

Bin Hamoodah Autos Opel, General Motors Abu Dhabi

Emirates Motor Company Mercedes-Benz Abu Dhabi

Omeir Bin Youssef Peugeot Abu Dhabi

Western Motors Fiat, Jeep Abu Dhabi

UAE's Automotive Sector and the Regional perspective - rak realestate

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