7 – 9 May 2017Dubai World Trade Centre

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Trends in the Middle East’s light vehicles sector to positively impact automotive spare parts market

As the ongoing growth of Automechanika Dubai will help testify, the Middle East* automotive industry continues to enjoy robust growth with light vehicle sales on an upward trajectory.

Drawing on research from Frost & Sullivan, the team at Automechanika Dubai looks at how vehicle sales in the Middle East continue to increase, helping to bolster the region’s automotive spare parts market.

*For the purposes of this report, the Middle East covers the GCC countries of Kingdom of Saudi Arabia,

UAE, Oman, Qatar, Bahrain and Kuwait as well as Iran, Iraq, Lebanon, Syria, Yemen and Jordan.

Trends in the Middle East’s light vehiclessector to positively impact automotivespare parts market

A look at Vehicle Sales

According to Frost & Sullivan research, close to 3.2 million light vehicles were sold in the Middle East in 2015. This figure is predicted to rise by an incredible 37.5 per cent to reach 4.4 million by 2020. While the GCC holds the lion’s share of the region’s light vehicle sales at 56 per cent (1.78 million units), its predicted CAGR between 2016 and 2020 is 8.5 per cent, half a percentage less than the predicted CAGR of Iran (9.1 per cent) and significantly less than the CAGR of Iraq, Lebanon, Syria, Yemen and Jordan, combined, which is predicted to be 14.9 per cent.

On and off the road

The research also revealed that there were circa 34.8 million light vehicles in operation (VIO) across the region’s roads in 2015 and in line with the increase in light vehicle sales, this is likely to increase by 27.9 per cent to 44.6 million by 2020. The difference in growth between light vehicle sales and VIO could be as a result of vehicles being removed from the market that are no longer road worthy due to age, accidents and other such factors. Indeed, Frost & Sullivan sees a drop in the average age of a light vehicle decrease across the region by 2020.

It is Iran that holds the lion’s share of VIO in the region at 49 per cent, but this could drop to circa 47 per cent by 2020, with close to 21 million VIO. Meanwhile the countries of Iraq, Lebanon, Syria, Yemen and Jordan, combined, are home to only 3.3 million VIO or a little under ten per cent with this expected to increase by 1 million vehicles by 2020, with a similar regional percentage. GCC on the other hand is expected to host 19.4 million VIO or circa 44 per cent by 2020.

Growth of the aftermarket industry

This growth trajectory for light vehicle sales and the number of VIO on the region’s roads can only mean one thing for the automotive spare parts market. Frost & Sullivan estimates the Middle East’s automotive spare parts market to have been worth USD 12.98 billion in 2015 and predicts it will enjoy a CAGR of 5.9 per cent until 2020, to reach a significant market value of circa USD 17.27 billion.

Once again, the GCC holds a large section of the market at 55.4 per cent, or USD 7.19 billion in 2015 with this expected to jump to USD USD 9.84 billion, or 57 per cent by 2020. Although Iran is expected to have more cars on its roads than the GCC, it holds a smaller share of the automotive spare parts market, possibly due to its traditional use and acceptance of low quality, non-genuine spare parts.

Similarly, while the countries of Iraq, Lebanon, Syria, Yemen and Jordan, combined, have 10 per cent of the region’s VIO, they hold 8.6 per cent of the automotive spare parts market with a valuation of USD 1.48 billion expected for those countries by 2020.

Automotive Light Vehicle Sales (in million units( Vehicles in Operation (VIO in million units(

Spare Parts (In USD billions(

Region 2015 2020 2015 2020 2015 2020

GCC 1.78 2.22 14.6 19.4 7.19 9.84

Iraq, Lebanon, Syria, Yemen, Jordan 0.19 0.32 3.3 4.3 1.11 1.48

Iran 1.21 1.86 16.9 20.9 4.67 5.95

TOTAL 3.18 4.4 34.8 44.6 12.97 17.27