Industry

Gulf car buyers may benefit from competing non-US manufacturers

April 11, 2025, 7:56 AM

Cars awaiting export at a port in Yokohama. Carmakers in Japan, Europe and China could seek more Gulf buyers in the wake of US tariffs

Chinese car companies expanding in Gulf
Exporters looking for new markets
US used cars may rise in price

The UAE and other Gulf markets may benefit from more competitively priced cars from China, Europe and Japan after the US imposed tariffs on imported vehicles this month and pledged to introduce similar duties on auto parts in May.

The auto tariff has left international car exporters, of which China is the largest, scrambling to tap alternative markets, while US duties on auto parts could make US-made cars for export more expensive.

The US is the world’s fourth-largest auto market.

The Chinese market share in the UAE surged 86 percent last year by units sold, though that share is still relatively small at 7 percent, according to the Middle East Automotive Council.

“Manufacturers may increase shipments to the UAE, offering buyers more choices, better prices, and a more competitive market overall,” said Sebastian Fuchs, managing director of British company AutoData.

“New cars from European and Chinese brands could become more affordable as manufacturers redirect inventory to the UAE.”

By contrast, used cars from the US “may become costlier due to supply issues and export challenges,” Fuchs said.

The UAE is also a shipment hub for the wider Gulf, Middle East and South Asia region.

Chinese companies, which are already expanding in the Gulf, are expected to deepen their presence in the region, where demand is steady and price competition is intense. Brands such as BYD, Jetour and Geely have made steady inroads to the region with technology-focused, competitively priced models.

Hasan Nergiz, managing director at Al-Futtaim Electric Mobility, the UAE distributor of all-electric BYD, told AGBI in February that the company was on “an exponential growth curve”, selling 500 to 1,000 cars a month since September and about 3,000 vehicles in total since entering the market 18 months ago.

It aims to sell 7,000 to 10,000 cars in the UAE this year, he said at the time.

“China is in the driver’s seat,” Imthishan Giado, partner at automotive trends and insights platform Motoring Middle East, told AGBI.

“This is the perfect opportunity for them to seize even more [market share]. All they have to do to increase volume is simply maintain prices.”

Giado expects Chinese car brands, which ship very few cars to the US, to “aggressively” increase marketing spend to encourage sales.

“China is going to move in for the kill,” he said. “Everybody else is scrambling to react. They have nothing to lose and only market share to gain.”

BYD, which overtook Tesla as the world’s top-selling electric vehicle maker last year, sold 3 million vehicles globally in 2023.

Oman is another Gulf market where the popularity of Chinese brands has been growing, even before Trump’s tariff debacle. Out of 5,200 cars bought in the sultanate in February, 22 percent were Chinese brands, up from 16 percent in January.

Mohammed Al Zadjali, owner of Muscat-based used car dealership Quality Seconds, said: “Chinese cars will continue to see an upward selling trend in the Gulf as long as the tariffs are in place.”