Dubai has effectively established itself as a global automotive hub. This is seen by the phenomenal expansion of the automobile sector in recent years, despite the Covid-19 pandemic, which has impacted the world economy in several ways. According to industry observers, the emirate has become a significant exporter and re-exporter of automobiles due to its ideal location, rising domestic demand for high-end vehicles, and a powerful logistics sector.
According to Dubai Industrial City managing director Saud Abu Al-Shawareb, Dubai's unique geographic location between the East and the West provides various benefits to automobile firms throughout the world. The rise in transportation prices is compelling enterprises to seek out the most direct and cost-effective routes to markets. "As a result, Dubai has become an important link in the global commerce network and a gateway to the area," Al-Shawareb reasoned.
The UAE is making a strong rebound following the Covid-induced worldwide recession, according to the Dubai Chamber of Commerce and Industry, Dubai's value of export and re-export has increased 21.8 percent year on year, hitting Dh.147.3 billion in January-August 2021. Sheikh Mohammed bin Rashid Al Maktoum, Vice President and Prime Minister of the United Arab Emirates and Ruler of Dubai, has established a five-year strategy to increase Dubai's international commerce from Dh.1.4 trillion to Dh.2 trillion.
Dubai's automotive industry plays a significant role in accomplishing the five-year plan, therefore it's no surprise that Dubai Chamber is collaborating closely with its partners in both the public and private sectors to make H.E. Sheikh Mohammed bin Rashid Al Maktoum's ambition a reality. "Our global representative offices play a critical role in finding export prospects for Dubai Chamber members and the larger business community in Dubai," said Dubai Chamber CEO and President Humad Buamim.
Other reasons that automotive players are interested in Dubai include the ease of doing business and the readily available industrial space, in addition to Dubai Industrial City's proximity to Jebel Ali Port and Al Maktoum International Airport, which allows them to reach two-thirds of the world's population in less than eight hours. Heavy-tow trucks now have direct access to the causeways that connect the UAE to Oman and Saudi Arabia, thanks to recent infrastructure improvements.
Dubai's expanding importance as the world's top automotive centre was bolstered recently when DP World paid $ 1.2 billion for the acquisition of Syncreon, a US-based expert in global automotive and supply chains. The move boosts DP World's end-to-end logistics even further. "The purchase will provide considerable knowledge in the wider supply chain as well as good relationships with cargo owners," said Sultan Ahmed Bin Sulayem, group chairman and CEO of DP World.
Over 2 million vehicles, including light, medium, and heavy commercial vehicles, are registered in the Gulf area. According to experts, the expanding vehicle population is increasing the need for spare parts, which is growing at an annual rate of 8.4 percent. The after-sales business is expected to be worth over $ 18 billion by 2023. Sultan Ahmed Bin Sulayem believes in Dubai's strength because corporations are looking for shorter supply chains and more diverse routes. That also explains why Dubai is unquestionably the world's automotive capital.