Dubai: An analysis by Dubai Chamber of Commerce & Industry indicates that whilst the UAE does not possess a sizable domestic automobile manufacturing capability, 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.

Auto car sales are expected to rise by an average of 5 per cent between 2009 and 2010 whilst car ownership is forecast to rise above 55 per cent this year for the first time in the country’s history (see table). Though, it is important to note that growth in the number of cars imported within the UAE does not mean growth in sales of cars in the domestic market, as a sizable number of cars are re-exported.

The analysis further revealed that though Abu Dhabi contributes over 55 per cent to overall UAE GDP, its economy is dominated by the energy sector. Thus, it is diversified Dubai that is experiencing the most rapid growth, and it has taken a lead in the auto sector, accounting for nearly 50 per cent of the total vehicle stock. This is despite the fact that Abu Dhabi took over Dubai in terms of population growth in 2006 (40 per cent of the total UAE population compared to around 30 per cent for Dubai).

The Dubai Statistical Centre suggests that nearly 28 per cent of vehicles in Dubai were owned by Emirati citizens, with the rest owned by expatriate households. Thus, the majority of cars are owned by non-Emiratis, but an Emirati household owns on average of 2.35 cars, compared with 0.92 for a non-Emirati household.