United Arab Emirates Seek to Create Pro-Business System

SEMA News—May 2011

SEMA Asked to Assist in Developing Regulations for Specialty Automotive Market

By Linda Spencer

    UAE had one of the world’s highest per capita disposable incomes in 2010. With the funds to pursue their hobby and low gas prices, consumers searching for products to personalize their luxury and sport-compact cars and light trucks are bringing savvy U.S. and other global companies to the market.
Off-roading on the sand dunes is also extremely popular, ranging from well-organized mega events at the Desert Challenge to car clubs and individuals who go out on the dunes over the weekend and then buy new products during the week. In fact, the UAE had one of the world’s highest per capita disposable incomes in 2010.    
    Executive Summary
  • Government officials in the UAE have announced an initiative to develop laws and regulations to support and legitimize their fledgling automotive specialty-equipment market and have asked for SEMA’s assistance in creating that system.
  • The Emirates Authority for Standardization and Metrology (ESMA) recently signed a memo of understanding with SEMA in recognition of the growing importance of the specialty-equipment market in the UAE.
  • Government officials, noting that there are currently no UAE-wide regulations governing the customization market, are seeking to benefit from SEMA’s experience in working closely with regulators in the United States and worldwide as they seek to create a legal framework that allows the attainment of safety and environmental goals without excessive market-hindering restrictions.
           
    Pictured here is a lovingly restored ’26–’27 Ford model T on display at the recent Dubai ESMA-SEMA signing.
With the enjoyment of vehicles so central to the UAE, it is perhaps fitting that the UAE’s National Day celebrations in early December were marked with, among other events, a classic car show. The show featured hundreds of vehicles from around the world and wound its way down the Emaar Boulevard. Luxury cars and SUVs are seen in the UAE as a status symbol. Pictured here is a lovingly restored ’26–’27 Ford model T on display at the recent Dubai ESMA-SEMA signing.    
    Emirates Authority for Standardization and Metrology Acting Director General Mohamed Badri (center) and SEMA Vice President of Communications and Events Peter MacGillivray (left)
Emirates Authority for Standardization and Metrology Acting Director General Mohamed Badri (center) and SEMA Vice President of Communications and Events Peter MacGillivray (left) joined U.S. Consul General Justin Siberell at the recent signing in Dubai of a memo of understanding with SEMA in recognition of the growing importance of the specialty-equipment market in the UAE.   
           
           

The United Arab Emirates (UAE) is less than 40 years old and known as one of the most vibrant and passionate car-enthusiast markets in the world. Dubai, Abu Dhabi and the five other Emirates that make up the UAE offer exciting vehicle customizing markets by many measures. Per capita, the country boasts the largest number of motorsports facilities in the world, and a quick drive in Dubai or Abu Dhabi will delight any gearhead with the wide variety of customized vehicles plying its modern roads.

“Consumers go to great expense to have that one-of-a-kind customized ride,” said Roman Gavrilin of the Middle East Motor Tuning Show (MEMTS). “I see a lot of passion to customize cars because they are something people here are proud of. I would say that we have huge potential growth here, which is supported by quite high disposable income.”

In fact, the UAE had one of the world’s highest per capita disposable incomes in 2010. With the funds to pursue their hobby and low gas prices, consumers searching for products to personalize their luxury and sport-compact cars and light trucks are bringing savvy U.S. and other global companies to the market.

Companies interested in exploring this market might consider exhibiting or visiting the upcoming Automechanika Middle East show in Dubai June 7–9. SEMA will have a booth at this trade-only event featuring more than 1,000 exhibitors.

The UAE is also a strategic gateway to the Middle East. Geographically the size of Portugal, its long coastline and strategic location have made the country a viable route to providing product to others within the Gulf Cooperation Council (GCC), a political and economic union involving six Arab states, which include Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the UAE. In recognition of the central role played by the UAE in the GCC and other Middle East countries, Ford, Chrysler and GM all have their Middle East headquarters in the UAE and view the it as an important market.

However, a major deterrent to growth in the absence of UAE-wide regulations regarding customization is law enforcement stopping customized vehicles on the roadway or failing consumers at annual inspections due to the presence of upgraded styling or performance products, particularly in Dubai. Customizing the approximately 8.7 million vehicles that are on the road in the Gulf region (with about 2.6 million registered in the UAE) is made more difficult due to uncertainty about what is allowable.

Zlatko Mulabegovic, managing director and editor of Dubai-based Top Performance magazine, said that the development of clear laws and regulations would have a tremendous impact on aftermarket business, giving business owners the much-needed confidence to stock legal products and providing end users with peace of mind when installing legal performance products on their vehicles. Mitch Perera, sales and marketing manager of Liberty Motorsports, agreed with that assessment.

“Specialty-equipment products are an important element of our business here in the Emirates,” Perera said. “This work is addressing our business and the interests of our customers.”

For more information on the UAE market, contact SEMA Director of International Relations Linda Spencer.

Rate this article: 
No votes yet