Middle East’s auto aftermarket industry braces for change, new survey finds

Dubai - Technology advances, economic shifts, and altered buyer behaviour to drive sector change

The Middle East’s automotive aftermarket industry is bracing for change over the next five years, according to the newly released Automechanika Market Outlook 2021.

The report is the third in an annual survey series conducted by GRS Explori, and commissioned by Messe Frankfurt Middle East, organiser of Automechanika Dubai, the Middle East’s largest international automotive aftermarket industry trade show, which opens on December 14 at the Dubai World Trade Centre (DWTC).

According to the report, 58 per cent of Middle East respondents said they had been negatively, or very negatively, impacted by the Covid-19 pandemic, with 82 per cent saying they are battling parts shortages and delays largely caused by logistics challenges.

Some 69 per cent said that they anticipate major or minor changes in their sector over the next five years, with the key drivers being technology advancement, economic shifts and altered consumer behaviour.

“The good news is that 76 per cent of Middle East respondents say they are ready to face the changes which puts the regional industry in a great position for recovery and growth,” said Mahmut Gazi Bilikozen, Automechanika Dubai’s show director.

“It is also encouraging that 36 per cent view the sector as growing over the next five years – which is up from 29 per cent in the 2018 survey so industry-wide optimism is increasing," he added. "A further 27 per cent of Middle East respondents in 2021 predict business to continue as usual while 30 er cent of Middle East respondents expect new technology to present significant opportunities.”

Within the Middle East, the segments most likely to face disruption, according to respondents, are parts and components, electronics and systems and repair and maintenance.

Electric and hybrid vehicles are seen by regional respondents as bringing in the most considerable disruption to the traditional petrol/diesel vehicle segment, with passenger cars being the biggest change driver. Within the region, 84 per cent anticipate change to an alternative fuel – up four percentage points on the initial survey in 2018.

“Interestingly, 40 per cent of Middle East operators report receiving customer enquiries for alternative fuel vehicle products and services,” added Bilikozen. “Yet, 55 per cent from within the garage and workshop sector admit they have not yet invested in the new equipment which will be needed to service electric vehicles though the majority say they know they need to invest but have not yet begun the process.”

Looking ahead five years, almost half the Middle East respondents anticipate electric, hybrid and solar-powered vehicles being commonplace on the region’s roads, with pricing and government policies being change catalysts.

Hydrogen fuel cell vehicles, say the respondents, won’t pick up the same pace until 2031, though 31 per cent believe autonomous vehicles will be on the region’s roads within five years, and 51 per cent are expecting private vehicle ownership to be impacted by ride and car-sharing businesses.

business@khaleejtimes.com