Categories: UAE

UAE leads charge in embracing digital car purchases, alternative drivetrains

DUBAI: Arthur D. Little (ADL) has released the fourth edition of its influential Future of Automotive Mobility (FOAM) report, presenting a detailed analysis of current and future trends in the automotive industry.

This year’s study, with insights from over 16,000 respondents across 25 countries, includes a comprehensive focus on the United Arab Emirates (UAE). The report examines car ownership, electric vehicles, autonomous driving, and new mobility services within the UAE.

Alan Martinovich

“The UAE is at the forefront of automotive innovation and consumer readiness for new mobility solutions,” said Alan Martinovich, Partner and Head of Automotive Practice in the Middle East and India at Arthur D. Little. “Our findings highlight the UAE’s significant interest in transitioning to electric vehicles, favorable attitudes towards autonomous driving technologies, and a strong inclination towards digital transactions in car purchases. These insights are critical for automotive manufacturers and policymakers navigating the evolving landscape of the UAE automotive market.”

Key Findings for the UAE:

  1. Car Ownership:
    • Over half of UAE respondents perceive that the importance of owning a car is increasing, with the study showing the increase higher than any other major region, including China.
    • Approximately 80 percent of UAE respondents expressed interest in buying new (as opposed to used) cars, above Europe and the USA which have mature used vehicle markets
  2. Shift to Electric and Hybrid Vehicles:
    • While a high number of UAE respondents currently own internal combustion engine (ICE) vehicles, more than half intend that their next vehicle has an alternative powertrain, with significant interest in electric and plug-in hybrid (PHEV) options. Less than 15 percent plan to opt for pure battery electric vehicles (BEVs).
  3. Emerging Mobility Trends:
    • Ride-hailing services are the most popular new mobility option among UAE residents, with higher usage rates than traditional car sharing and ride sharing. The study indicates a strong openness to switching to alternative transport modes given the quality and service levels available today.
  4. Autonomous Vehicles:
    • UAE consumers are among the most open globally to adopting autonomous vehicles, with a significant increase in favourable attitudes from 32 percent in previous years to 60 percent this year versus approximately 30 percent in mature markets. Safety concerns, both human and machine-related, remain the primary obstacles to broader adoption.
  5. Car Purchasing Behaviour and Sustainability:
    • The internet has become a dominant channel for UAE residents throughout the car buying process, from finding the right vehicle to arranging test drives and closing deals. UAE car buyers visit dealerships an average of 3.9 times before making a purchase, higher than any other region in the world, emphasising the need for efficient integration of online and offline experiences.
    • Upwards of 53 percent of respondents from the region would prefer to ‘close the deal’ and complete the purchase of their car online, which is the highest for any region in the world.
    • Sustainability is a key factor cited by UAE consumers as influencing car choice. The UAE scored among the top half of regions, highlighting the importance of environmental considerations.
Philipp Seidel

“Our study confirms the promising market opportunities for car manufacturers (OEMs) and distributors in the UAE,” commented Philipp Seidel, Principal at Arthur D. Little and co-author of the Global Study. “Consumers in the Emirates show a great and increasing appetite for cars while being among the most demanding globally when it comes to latest vehicle technologies and a seamless purchase and service experience.”

The comprehensive report, ‘The Future of Automotive Mobility 2024’, by Richard Parkin and Philipp Seidel, delves into global automotive trends and their impact on various regions, including the UAE. This study is an invaluable tool for industry stakeholders seeking to navigate and leverage the dynamic changes driving the future of mobility.

Web Desk

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