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Will UAE see increase in car prices, drop in new vehicle models amid Trump tariffs?
While the GCC auto sector may be affected by disruptions in global market, UAE customers may also find better choices and deals in case of excess inventory redirected to the country
Buying new cars in the UAE could get more expensive in the aftermath of new tariffs rolled out by US President Donald Trump, say experts. The impact could even extend to car maintenance and repairs. However, others have stated that GCC markets could benefit from lower vehicle prices.
“This will fuel a price increase not just in the UAE but across the world,” said Shah Bashrat, an automotive industry expert with over three decades of experience. “Many top car manufacturers have plants in the US and these new tariffs will impact them.”
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Trump on Wednesday announced 25 per cent tariffs on all cars shipped to the US. New tariffs will also be applied not just to foreign-made cars but also to car parts, including engines and transmissions – a move that is expected to be rolled out no later than May 3.
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Bashrat’s comments were supported by international commentators as well. In an interview with CNN, former Ford CEO Mark Fields said that every single vehicle would become more expensive.
For Ifthikar Aly, Founder and MD of Kandy cars, which imports second hand American muscle cars into the UAE, prices will definitely increase. “The price of the vehicles we specialise in will likely increase, albeit after a few months,” he said. “The tariffs will also increase costs for US-manufactured vehicles that rely on internationally sourced components. American specification vehicles from non US-based manufacturers like Lexus, BMW and Mercedes may experience price increases ranging from 10 to 15 per cent.”
However, Rahul Singh, Managing Director of the Car Rental Division at Dollar and Thrifty UAE said that the UAE’s automotive landscape is “entering a period of opportunity” with lower prices, better availability, and intense competition.
“Unlike the US, where tariffs will directly increase costs, the UAE is more likely to see stable or even lower car prices,” he said. “The tariffs will disrupt global automotive supply chains, forcing major manufacturers to find new markets for cars. Since production lines cannot be adjusted overnight, these vehicles must go somewhere, and the GCC, including the UAE, is a strong contender. If manufacturers redirect excess inventory from the US to alternative markets like the UAE, this could create abundance of vehicle availability and help stabilise prices or even lower it.”
He said this could mean better choices and deals for UAE consumers, but in a “volatile global economy”, things could shift overnight.
Ifthikar added that he could foresee more residents rushing to buy cars soon. “Given the anticipated price increases, consumers will likely seek to purchase vehicles sooner rather than later in order to mitigate additional costs,” he said.
According to Abhinav Gupta, CEO of CARS24 in the gulf region, the next few months will prove crucial. “The auto sector in the GCC will largely remain on the safe side for customers; however there may be some disruptions to the global supply chain from the newly implemented tariffs,” he said. “For example, the Chinese EV car market will experience some potential fluctuations, so the next few months will be crucial to assess consequences.”
He added that GCC residents can expect “some delays” in availability of “spare parts and flow of new car models” coming from countries affected by tariffs but there will be opportunities.
“On the other hand, the tariffs will also open an opportunity for cars produced in Asia, especially China, to capture a higher market share in this region due to their competitive pricing and high-efficiency models,” he said. “The next six months are going to be instrumental in understanding how global automakers will align their supply chains with these regulations and if there will be further negotiations that will be put in place.”
Rahul agreed that the next six months will be a “period of global realignment” as automakers scramble to redirect supply while also adjusting production for the long term.
“Countries in the Middle East are focusing on trade talks, especially about tariffs, while major economies like China, Japan, and Korea are struggling with their manufacturing,” he said. “This means the global supply chain may continue to face challenges. Additionally, there’s growing uncertainty around inflation and interest rates, creating a sense of instability.”
Nasreen Abdulla
Nasreen Abdulla is a Special Correspondent covering food, tech and human interest stories. When not challenged by deadlines, you’ll find her pulling off submissions on the jiu jitsu mats.
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