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UAE: Automotive sector grows by 10.8% in first quarter

Automotive sector

Abu Dhabi, (Business News Report)||  The automotive sector sales in the United Arab Emirates grew by 10.8% in the first quarter of this year 2022.

Michel Ayat, CEO of Abdul Wahed Al Rostamani Motors, said that the exceptional support of the UAE leadership and its maintenance of the country’s economic growth momentum was reflected in the automotive sector.

Ayat expected the growth of car sales in the UAE to 10% this year.

Ayat added, “The automotive sector is currently witnessing an imbalance between supply and demand due to the global shortage of chips.”

Customer demand is stronger than ever, and had it not been for circumstances beyond our control, our total inventory volume would have exceeded pre-pandemic levels.

However, this shortage also affects the revenues of the auto companies operating in the country at a time when operating expenses are still high.

Dealers who were lucky enough to pre-purchase stock took advantage of this circumstance, with customers choosing them for their ability to get the cars delivered to them as quickly as possible, which led to the emergence of a different system, based on availability rather than loyalty.

Ayat pointed out that there are certain operational constraints affecting the global auto sector, such as the lack of chips, which is slowing down the production of new cars. There has also been a recorded shortage of containers in the global logistics industry, which has affected the automotive supply chain and global deliveries of vehicles and parts.

In addition to all this, the increase in shipping costs, raw materials, fuel prices and operating expenses, these items combined will add more costs to vehicle suppliers and distributors and will be challenges facing our industry on a daily basis.

Ayat expected that the problem of the shortage of chips would soon be overcome by overcoming the obstacles facing production processes, and the occurrence of stability in the other supply chain.

He continued, “We are working with the manufacturers to ensure that price increases are minimized as much as possible between the OEM and the dealers to ensure that customers are not significantly affected by these conditions.”

The CEO of Abdul Wahed Al Rostamani Motors explained that the current challenges in the sector are known to all and are beyond the control of the agencies. However, they highlight the best that we can offer, and make us better prepared for the future.

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