MIDDLE EAST AND AFRICA
AUTOMOTIVE AFTERMARKET
A KNOWLEDGE REPORT
PREPARED FOR
MIDDLE EAST AND AFRICA AUTOMOTIVE AFTERMARKET © TechSci Research 2
C O N T E N T
1 Spotlight on Middle East & Africa
2 Current status of Middle East Market
3 Overview of Vehicle Fleet, Sales and Automotive Aftermarket
4 Vehicle Fleet Age Distribution
5 Middle East & Africa Vehicle Sales Overview
6 Middle East & Africa Automotive Aftermarket Overview
7 Market of New Automotive Technologies in Middle East & Africa
8 Market Attractiveness Index (Automotive Aftermarket)
9 Factors Impacting Sales of Vehicles
10 Trends & Developments
11 Dealer Survey – Impact of VAT
TABLE OF CONTENT
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MIDDLE EAST AND AFRICA AUTOMOTIVE AFTERMARKET © TechSci Research 3
TOTAL ESTIMATED VEHICLE FLEET
42 Million*
89%
11% PASSENGER VEHICLE
COMMERCIALVEHICLE
SHARE OF VEHICLE SEGMENT, VOLUME SALES
VEHICLE SALES VOLUME, 2017
3* Million Units
MIDDLE EAST AFRICA
SHARE OF VEHICLE SEGMENT % SALES
TOTAL VEHICLE FLEET
50 Million*
VEHICLE SALE VOLUME, 2017
1.3* Million Units
AUTOMOTIVE AFTERMARKET SALES VALUE, 2017
$ 12**Billion
TOTAL ESTIMATED No. OF AFTERMARKET OUTLETS
50 Thousand**
SHARE OF AFTERMARKET PARTS, VALUE SALES
AUTOMOTIVE AFTERMARKET SALES VALUE, 2017
$ 10** Billion
TOTAL No. OF AFTERMARKET OUTLETS
45 Thousand**
SHARE OF VEHICLE SEGMENT % SALES
*Includes both passenger and commercial vehicle**Estimated figures
Tyres 22%
Batteries5%
Engine Oil/Lubricant/Coolant7%
Brake System Parts 4%
Automotive Filters5%
Electrical Parts/Lightning2%
Others55%
Source: OICA, Whitepapers, Articles, TechSci Estimates
Middle East includes GCC countries, Iran, Israel, Yemen, Jordan, Lebanon
Tyres 23%
Batteries5%
Engine Oil/Lubricant/Coolant6%
Brake System Parts 6%
Automotive Filters5%
Electrical Parts/Lightning2% Others
53%
SPOTLIGHT ON MIDDLE EAST & AFRICA
75%
25%PASSENGERVEHICLE
COMMERCIALVEHICLE
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MIDDLE EAST AND AFRICA AUTOMOTIVE AFTERMARKET © TechSci Research 4
C U R R E N T S TAT U S O F M I D D L E E A S T M A R K E T
Middle East is witnessing a slowdown in its economy due to impact of lower oil prices and trying to manage by instituting some severe measures and exploring ways to make their economies less oil-dependent.
The decline in oil prices has resulted in the worst economic slowdown since the global financial crisis of 2009-2010. The downturn in oil prices impacted many small and medium enterprises, along with larger corporations.
Some of these corporates in vehicle fleet business had large contracts with oil related businesses. Timelines of these oil projects extended due to economic downturn. This made some of the vehicle fleet companies to extend lease terms because payments were not released and their was large payables owed by governmental entities. This forced fleets to keep vehicles in service longer, extending the vehicle’s lifecycle costs.
In addition, earlier stern steps taken by the government diminished consumer sentiments deferring automotive purchases. However, these strict steps have since been somewhat relaxed. One recent development that may spur future sales is that, for the first-time ever, women will be allowed to drive in Saudi Arabia starting in June 2018.
CURRENT STATUS OF MIDDLE EAST MARKET
4
OVERVIEW OF VEHICLE FLEET, SALES
AND AUTOMOTIVE AFTERMARKET
MIDDLE EAST AND AFRICA AUTOMOTIVE AFTERMARKET © TechSci Research 6
MARKET ASSESSMENT OF VEHICLE FLEET,
SALES AND AUTOMOTIVE AFTERMARKET
31.06 33.23 34.96 37.00 39.25 41.64
2.88 2.72 3.29 3.14 3.05 3.12
9.75 10.25 10.75 11.25 11.75 12.4
0
5
10
15
0.00
10.00
20.00
30.00
40.00
50.00
2012 2013 2014 2015 2016 2017
AU
TOM
OTI
VE
AFT
ERM
AR
KET
IN
$ B
ILLI
ON
MIL
LIO
N U
NIT
Middle East
Vehicle Fleet (in million units) New Vehicle Sales (in million units)
Automotive Aftermarket (in billion USD)
38.6 40.4 42.4 44.8 47.1 49.5
1.57 1.65 1.72 1.55 1.31 1.26
6.5 7.28.0
8.99.9
11.0
0.0
5.0
10.0
0.0
20.0
40.0
60.0
2012 2013 2014 2015 2016 2017
AU
TOM
OTI
VE
AFT
ERM
AR
KET
IN
$ B
ILLI
ON
MIL
LIO
N U
NIT
Africa
Vehicle Fleet (in million units) New Vehicle Sales (in million units)
Automotive Aftermarket (in billion USD)
✓Middle east market is witnessing a slow growth pertaining to vehicle sales. GCC market is under tremendous
pressure to regain the pace which it has lost in last 3 years. Iran and Israel are the only two countries which had
given a boost to the overall vehicle market.
✓ Automotive aftermarket growth is directly associated with vehicle fleet. With inclusion of new taxes and revised
registration rates in GCC countries, vehicle owners are less interested in buying new vehicles and are focusing
more on maintaining older vehicles which will eventually boost the automotive aftermarket in the long run
✓ Furthermore new automotive technologies & accessories like infotainment, telematics, dashcam etc. are in great
demand which has further .enhanced the growth prospects.
✓ Africa is a huge market for used vehicles imported from different countries. Current infrastructure, usage pattern
etc. have increased the pace of aftermarket growth in the country.
Source: OICA, Whitepapers, Articles, TechSci Estimates
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MIDDLE EAST AND AFRICA AUTOMOTIVE AFTERMARKET © TechSci Research 7
4% 6%
47%37%
43%
39%
6%
18%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Middle East Africa
PA S S EN G E R C A RS
Less then 2 years 2 to 4 years
4 to 8 years 8 to 15 years
➢ Passenger vehicle fleet in middle east is relatively young with more than half of the fleet under 4 years of
vehicle age. Most of the older vehicles are either exported to Africa or are scrapped.
➢ Africa on the other hand is driven by some of the major countries like South Africa, Egypt etc. where new
vehicle sales is on the rise but parallel import of used vehicles to some of the less developed countries have
increased the average age of the vehicle in use.
3% 2%
37%
25%
48%
45%
12%
28%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Middle East Africa
C O M M E RC I A L V E H I C L ES
Less then 2 years 2 to 4 years
4 to 8 years 8 to 15 years
Source: Whitepapers, Articles, TechSci Estimates
VEHICLE FLEET AGE DISTRIBUTION
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MIDDLE EAST AND AFRICA AUTOMOTIVE AFTERMARKET © TechSci Research 8
2.32
2.17
2.68
2.64
2.68
2.78
3.33
0.56
0.54
0.61
0.50
0.38
0.34
0.34
2012
2013
2014
2015
2016
2017
2022F
0.00 1.00 2.00 3.00 4.00
Vehicle Sales (in million units)
Commercial Vehicle
Passenger Cars
While there has been drastic drop in sales of commercial vehicles across middle east, passenger vehicle sales
increased due to demand in countries like Iran & Israel. Sales in GCC countries is largely affected due to
sluggish economy, oil prices and regulatory & policy revisions.
3% 3% 3% 3% 3% 3% 4%
9% 8% 11% 10% 8% 8% 7%
26%
18% 17% 17% 15% 15% 15%
15% 27% 25% 29%28% 28% 28%
46% 44% 44% 42% 46% 46% 47%
2012 2013 2014 2015 2016 2017 2022F
MPV Hatchback Pickup SUV Sedan
5% 4% 5% 3% 3% 3% 3%
11% 14% 16%11% 11% 12% 14%
12% 11% 7%5% 6% 6% 7%
72% 83% 72% 81% 80% 79% 76%
2012 2013 2014 2015 2016 2017 2022F
Light Commercial Vehicles
Medium Commercial Vehicles
Bus
Heavy Commercial Vehicles
PASSENGER VEHICLE – Share by Vehicle Type
COMMERCIAL VEHICLE – Share by Vehicle Type
Source: OICA, Whitepapers, Articles, TechSci Estimates
MIDDLE EAST VEHICLE SALES OVERVIEW
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MIDDLE EAST AND AFRICA AUTOMOTIVE AFTERMARKET © TechSci Research 9
1.15
1.20
1.25
1.13
0.98
0.94
0.95
0.42
0.46
0.47
0.42
0.33
0.32
0.33
2012
2013
2014
2015
2016
2017
2022F
0.00 0.50 1.00 1.50
Vehicle Sales (in million units)
Commercial Vehicle
Passenger Cars
The market figures continued to reflect subdued investment sentiment in the economy. Global economic
pressure coupled with collapse in global commodity prices have slowed the growth in African continent.
4% 4% 5% 5% 5% 5% 5%
9% 8% 11% 10% 10% 10% 9%
21%15% 15% 17% 13% 11% 11%
10% 19% 15% 16% 18% 18% 18%
56% 54% 54% 52% 54% 56% 57%
2012 2013 2014 2015 2016 2017 2022F
Sedan SUV Pickup Hatchback MPV
7% 6% 8% 7% 7% 8% 7%
13% 15% 16%11% 12% 12% 14%
18% 16% 15%11% 11% 11% 13%
62% 63% 61% 71% 70% 69% 66%
2012 2013 2014 2015 2016 2017 2022F
Light Commercial Vehicles
Medium Commercial Vehicles
Bus
Heavy Commercial Vehicles
PASSENGER VEHICLE
COMMERCIAL VEHICLE
Source: OICA, Whitepapers, Articles, TechSci Estimates
AFRICA VEHICLE SALES OVERVIEW
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MIDDLE EAST & AFRICA AUTOMOTIVE
AFTERMARKET OVERVIEW
MIDDLE EAST AND AFRICA AUTOMOTIVE AFTERMARKET © TechSci Research 11
MIDDLE EAST
Tyres 20%Batteries
6%
Engine Oil/Lubricant/Coolant7%
Brake System Parts 4%
Automotive Filters5%
Electrical Parts/Lightning2%
Others56%
Tyres 22%Batteries
5%
Engine Oil/Lubricant/Coolant7%
Brake System Parts 4%
Automotive Filters5%
Electrical Parts/Lightning2% Others
55%
2017
2022F
Market Value
$ 12 Billion
Market Value
$ 16 Billion
AFRICA
Tyres 21%
Batteries5%
Engine Oil/Lubricant/Coolant6%
Brake System Parts 6%
Automotive Filters5%
Electrical Parts/Lightning2%
Others55%
Tyres 23%
Batteries5%
Engine Oil/Lubricant/Coolant6%
Brake System Parts 6%
Automotive Filters5%
Electrical Parts/Lightning2% Others
53%
2017
2022F
Market Value
$ 11 Billion
Market Value
$ 15 Billion
Middle east automotive aftermarket is forecasted to reach 16 Billion USD by 2022. This market will
majorly be driven by existing vehicle parc coupled with improving vehicle sales.
Africa automotive aftermarket is forecasted to reach 15 Billion USD by 2022. Increase in vehicle parc owing to new as well as used vehicle sales have
improved the demand for aftermarket components and accessories
Source: OICA, Whitepapers, Articles, TechSci EstimatesOthers – Includes engine parts, maintenance
parts, mechanical parts, accessories etc.
MARKET SHARE OF AFTERMARKET
COMPONENTS IN MIDDLE EAST & AFRICA
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MIDDLE EAST AND AFRICA AUTOMOTIVE AFTERMARKET © TechSci Research 12
64 67 69 71 74 76 78
279 296 314 332 349 367 384
2012 2013 2014 2015 2016 2017 2022
Batteries ASP in USD
Passenger Car Commercial Vehicle
102 106 111 116 121 126 156265 278 287 300 314 329
406
2012 2013 2014 2015 2016 2017 2022
Tire ASP in USD
Passenger Car Commercial Vehicle
35 38 40 43 45 48 5062 65 68 71 74 77 80
2012 2013 2014 2015 2016 2017 2022
Engine Oil/Lubricant ASP in USD
Passenger Car Commercial Vehicle
3.5 3.8 4.1 4.5 4.8 5.1 5.47.8 8.6 9.3 10.1 10.9 11.6 12.4
2012 2013 2014 2015 2016 2017 2022
Automotive Filter ASP in USD
Passenger Car Commercial Vehicle
58 59 61 62 63 64 70
265 268 272 274 276 281311
2012 2013 2014 2015 2016 2017 2022
Batteries ASP in USD
Passenger Car Commercial Vehicle
94 102 109 117 125 132 140248 270 293 315 337 360 382
2012 2013 2014 2015 2016 2017 2022
Tire ASP in USD
Passenger Car Commercial Vehicle
32 34 36 38 40 42 4458 61 64 67 70 73 76
2012 2013 2014 2015 2016 2017 2022
Engine Oil/Lubricant ASP in USD
Passenger Car Commercial Vehicle
2.8 3.1 3.4 3.8 4.1 4.4 4.76.5 7.1 7.7 8.4 9.0 9.6 10.2
2012 2013 2014 2015 2016 2017 2022
Automotive Filter ASP in USD
Passenger Car Commercial Vehicle
MIDDLE EAST AFRICA
MARKET PRICE OF AFTERMARKET
COMPONENTS IN MIDDLE EAST &
AFRICA
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MIDDLE EAST AND AFRICA AUTOMOTIVE AFTERMARKET © TechSci Research 13
M A R K E T S I Z E O F L AT E S T A U T O M O T I V E T E C H N O L O G I E S
32.16 35.54 39.38 43.74 48.67 54.31
1.00
21.00
41.00
61.00
2016 2017E 2018F 2019F 2020F 2021F
Value (USD Million)
CAGR 2016-2021F
By Value: 11.05%
Source: TechSci Research
0.941.23
1.632.15
2.84
3.74
0.00
1.00
2.00
3.00
4.00
2016 2017E 2018F 2019F 2020F 2021F
V a l u e ( U S D B i l l i o n )
CAGR 2016-2021F
By Value: 32%
Middle East and Africa Connected Cars Market
✓ According to TechSci research, the growing demand for safety and vehicle assist features specially in
countries like Saudi Arabia where government have allowed women drivers is a point of inflection for
connected cars market which is projected to grow at a CAGR of 32% and reach 3.74 billion USD by 2021.
✓ Automotive technologies such as telematics, advanced infotainment systems, ADAS etc. are increasingly
becoming popular among masses. While some of basic features are available across most of the vehicles
present in middle east, advanced technologies like ADAS is yet to penetrate in a big way.
MARKET SIZE OF LATEST
AUTOMOTIVE TECHNOLOGIES
Middle East and Africa Dashboard Camera Market
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MIDDLE EAST AND AFRICA AUTOMOTIVE AFTERMARKET © TechSci Research 14
M A R K E T AT T R A C T I V E N E S S I N D E X O F A F T E R M A R K E T C O M P O N E N T S I N M I D D L E E A S T & A F R I C A
Iran
SaudiArabia
UAE
Israel
Kuwait
Oman
SouthAfrica
Egypt
Libya
Kenya
0.00%
2.00%
4.00%
6.00%
8.00%
10.00%
12.00%
-1.00 0.00 1.00 2.00 3.00 4.00 5.00 6.00 7.00 8.00 9.00
Note: The size of the bubble corresponds to the market size in 2017
Low Medium High
CA
GR
(2
01
7-2
02
2F)
Iran, Saudi Arabia, UAE and South Africa are top 4 markets which will continue to generate new demandfor aftermarket auto components. While Iran and Israel are two of the countries with encouragingvehicle demand, Saudi & UAE though under tremendous market pressure will continue to generate thedemand for auto component aftermarket.
MARKET ATTRACTIVENESS INDEX OF AFTERMARKET
COMPONENTS IN MIDDLE EAST & AFRICA
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MIDDLE EAST AND AFRICA AUTOMOTIVE AFTERMARKET © TechSci Research 15
FA C T O R S I M PA C T I N G S A L E S O F V E H I C L E S
Type of vehicle First time RenewalTransfer
ownershipRe-registering
Licensing a light vehicle 400 350 350 400
Licensing a vehicle that weighs 3 to 12 tons 500 400 400 500
Licensing a vehicle that weighs more than 12 tonnes 900 800 800 900
Licensing a light mechanical vehicle 600 500 500 600
Licenisng a heavy mechnical vehicle 1,000 800 800 1,000
Licensing Trailers and semi-trailers 120 120 120 120
Licensing a bus with 14-26 passenger capacity 500 300 300 500
Licensing a bus that exceeds 26 passenger capacity 1,200 600 600 1,200
Revised Vehicle Licensing Fees (AED)
✓ Countries like UAE are witnessing revision of vehicle licensing, license renewal fees etc.. This will significantly affect the decision of
customers in buying a new or used vehicle.
✓ While new car license has gone done from Dh460 to Dh400, the second hand car carries an additional transfer ownership fee of Dh350
bumping up the overall fees to Dh750.
✓ Similarly vehicle testing and driver license fees has also gone up adding to the dismay of customers.
Increase in Vehicle Registration/License Fess
Introduction of Value Added Taxes
✓ VAT of 5% is imposed on new vehicle sales, fuel consumption and after sales services/parts as well. This has significantly impacted the
demand of new cars in the region. The market sentiments are low but it is anticipated that as the market matures the taxes will be
accepted.
Regulation Allowing Saudi Women To Drive
✓ Saudi Arabia is the major market for passenger vehicles and half of the GCC vehicle market is captured by this country. With new
regulation allowing Saudi women to drive vehicles is expected to boost vehicle sales and more importantly segments like hatchbacks
will witness higher growth in comparison to previous years. It is also expected that demand for new vehicle technologies like
telematics, advanced infotainment systems, autonomous vehicle etc. with enhanced safety features will be on a rise as women drivers
will prefer to have these features in the vehicles they’ll drive.
FACTORS IMPACTING SALES OF VEHICLES
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MIDDLE EAST AND AFRICA AUTOMOTIVE AFTERMARKET © TechSci Research 16
➢ The outlook for future sales of vehicles in Middle East is positive. Anticipated stabilization of crude oil prices,
implementation of favorable government initiatives, growing infrastructure construction and logistics industry
will drive sales of trucks, buses, and vans in the region. In order to accommodate growing vehicle demand of the
Kingdom, countries like Saudi Arabia plans to increase investments toward strengthening and expanding the
country’s road infrastructure.
➢ The Dubai Chamber of Commerce and Industry has formed the Automotive Manufacturers Business Group,
which will be tasked with developing and advancing Dubai’s automotive industry and provide a platform for
industry stakeholders to collaborate.
➢ Rapid industrialisation and modernisation currently sweeping through many African countries has resulted in an
increased demand for capital goods such as machinery, lubricants, spare parts, ball bearings and other
mechanical goods and accessories. The market for automobile spare parts, in particular, has been an attractive
sector for UAE-based enterprises, who have emerged as the leading supplier of these goods to many countries in
East, Central and Southern Africa
➢ Saudi Arabia plan to develop an entertainment city with an investment of 64 Billion USD will pave the way for
increased tourist movement as well as local transportation. It will increase demand for private as well as public
transportation in the country. This is well backed up by introduction of tourist visa for other nationals from 1st
April, 2018 onwards.
TRENDS & DEVELOPMENTS
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MIDDLE EAST AND AFRICA AUTOMOTIVE AFTERMARKET © TechSci Research 17
D E A L E R S S U R V E Y – I M PA C T O F VAT
H O W D O Y O U F E E L A B O U T V AT I N C L U S I O N I N A U T O M O T I V E ?
0% 45% 55%
0% 40% 60%
Base: 30 Passenger Car Dealers
Base: 30 Commercial Vehicle Dealers
POSITIVE NEUTRAL NEGATIVE
Post VAT inclusion of 5% imposed on new vehicle sales, fuel consumption and after sales services/parts, TechSci had
a small survey done with some of the dealers in GCC to understand their perception over this new regulation.
Out of 60 dealers interviewed for both passenger and commercial vehicle segment none was found to be positive
about VAT inclusion. More than half of the dealers showed negative sentiments.
DEALERS SURVEY – IMPACT OF VAT
17
ABOUT AMDU 2018
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Disclaimer
The contents of this report are based on information generally available to the public from sources believed to be reliable. No representation is made that it is timely,accurate or complete. TechSci Research has taken due care and caution in compilation of data as this has been obtained from various sources including which it considersreliable and first hand. However, TechSci Research does not guarantee the accuracy, adequacy or completeness of any information and it is not responsible for any errorsor omissions or for the results obtained from the use of such information and especially states that it has no financial liability whatsoever to the subscribers / users ofthis report. The information herein, together with all estimates and forecasts, can change without notice. All the figures provided in this document are indicative ofrelative market size and are strictly for client’s internal consumption. Usage of the same for purpose other than internal will require prior approval of TechSci Research.
ABOUT TECHSCI RESEARCH
As the largest international automotive aftermarket trade show in the Middle East, Automechanika Dubai servessome of largest automotive markets such as Saudi Arabia and Iran. The show also acts as the central trading linkfor markets that are difficult to reach connecting the wider Middle East, Africa, Asia and key CIS countries.
Now in its 16th edition, the exhibition offered trade professionals the chance to meet face-to-face 1,955 keyexhibitors across the three day show held from 1 - 3 May 2018.The trade show is a good platform to find out more about the latest products and services, find new suppliers,source products and compare product alternatives.
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