The luxury car is the status symbol for the ultra-rich people living in society. Moreover, luxury cars are expensive due to its lavish features, comfortable seats, and unique design. Further, luxury car maintenance is comparatively higher than other cars as each part of the luxury car is manufactured in different countries, which makes the availability difficult at times of replacement. Among the middle eastern countries, UAE represents one of the most attractive markets for luxury goods. The wealthy residents of the UAE spend billions purchasing designer shoes, clothes, and luxury cars.
The UAE luxury car market expected to grow at a momentous rate in the forecast period from 2020-2027. The UAE is the eighth country around the world, which holds the largest share in luxury cars. The top luxury car players like Ferrari, BMW, Audi, have the highest sales in the UAE. The luxury car market in UAE will drive by significant factors such as the strong purchasing power of the resident across the region, and the price of fuel in the UAE is less compared to other parts of the globe. Furthermore, the low import tariffs, high per capita disposable income, and favorable tax regimes in the UAE are other major driving forces of the luxury cars market.
The government of the UAE provides an attractive scheme for insurance and financing of cars, which makes it easier for consumers to buy luxury cars. Further, the government of the UAE provides many after-sale services to the consumers, which helps in increasing the demand for a luxury car in the UAE. In the coming years, UAE will witness a surge in the luxury car market because UAE has been promoting the hybrid electric vehicle to reduce the carbon emission and promote clean mobility. Under this initiative, global luxury car players like Tesla have launched its operation in the UAE via online platforms and offering such vehicles. Furthermore, the shifting in consumer preference from sedan to SUVs and increasing income of the consumer have increased the demand for luxury cars in UAE in the future time.
Due to the ultra-rich population with notable wealth and rising per capita disposable income results in shifting consumer preferences towards comfort, advanced technology, thus, increases the market share for luxury cars across the UAE. Further, highly driven market forces led to a shift in the demand from SUVs to Sedan cars. Therefore, the surge in the income level of the consumers led to the rise in demand for luxury cars.
Government of UAE provide various attractive schemes like providing car insurance benefits and financing of luxury cars which attract the consumers in purchasing luxury cars. In addition to it, the decrease in fuel price and favorable tax schemes allow users to fulfill their luxurious dreams. Therefore, this helps in increasing the significant demand for the UAE luxury cars market.
UAE has taken the initiative towards the environmental concern and diverting towards less carbon emission fuel vehicles and the adoption of electric vehicles or hybrid electric vehicles. Major energy and automotive company Tesla, which specializes in electric car manufacturing, is supporting the initiative and starts its online operation in UAE, which expected to accelerate the growth of the luxury car market over the forecast period.
Based on the type, UAE luxury cars market categorized into compact car, mid-size, full size, larger car, SUV/Crossover, Super sports car, and Others. SUV/Crossover segment estimated to lead the market due to the availability of different models with various price ranges, coupled with user-friendly financing schemes. Additionally, SUVs offer higher safety due to the installation of various safety features, and these high-end cars are high-power vehicles with higher seating, ground clearance, and sufficient capability to travel on off-road conditions.
Based on the price type distribution, the UAE luxury market comprised of an entry-level range, mid-range, and premium range. Among the price type distribution of luxury cars, mid-range luxury cars capture larger share than entry-level and premium range cars. Additionally, the mid-range segment will influence by advanced technology used in luxury cars such as sensing RADAR, artificial intelligence, and self-driving vehicles to enhance the cost of the cars and thus make it luxurious and comfortable.
Companies such as Volkswagen Group, Daimler AG, Bayerische Motoren Werke AG (BMW), Volvo Group, Tata Motor Limited, General Motors Company, Tesla Inc., Ford Motor Company, Aston Martin Lagonda Ltd, Honda Motor Co., Nissan, Mercedes-Benz, BMW, Lexus, Audi, Land Rover, Jaguar and other are key prominent players in the UAE luxury car market.
By Types of Luxury Cars
By Price Type