How China won over the car market in the UAE

Jetour

You see them everywhere on UAE streets now: a familiar, boxy shape with tough chunky wheel arches and ferociously-tinted wrap-around glass. Where mall-goers roam, they congregate. Even in the depths of the Liwa desert this winter, they could be found roaming amid the sea of Japanese SUVs.

Sounds like the legendary Mercedes G-Wagen, default choice of the UAE’s glitterati and VIPs? 

No. It’s actually the quietly successful Jetour T2, a Chinese-made mid-size sports utility vehicle (SUV), which has become ubiquitous on the streets of the UAE in under two years.

How did this come to pass? The bigger question is how Jetour and other Chinese companies managed the impossible: to affect a hostile takeover of the UAE market for low and mid-market cars without the faintest murmur of protest from its Japanese, American, European or Korean rivals.

Between 2023 and 2024, Chinese automakers increased their market share of the overall UAE market from 4 percent to almost 7 percent, representing an 86 percent increase in units sold, according to the Middle East Automotive Council.

While these self-reported figures cannot be independently verified, the sheer numbers of Chinese cars I’ve seen on the road and the bewildering number of new brands leave me in little doubt that Chinese carmakers have achieved significant inroads in the past 12 months. 

Let’s take a step back to the Covid years. As the pandemic bit, mainstream brands first found themselves without customers, and then without the crucial chips needed to manufacture these increasingly electronic vehicles. 

In response, virtually all the mainstream manufacturers decided to reduce inventories. You can guess what happened next. When demand returned, they were left without cars to sell to a ravenous public. 

Given the shortage of cars and the chips needed to make them, manufacturers took drastic measures. Expensive trucks arrived without desirable features, such as wireless chargers or even extra keys, just to fill showrooms. At one point, a Toyota RAV4 or Camry was available upon deposit … after 12 months. Not great if you needed a vehicle to get to work tomorrow. 

Consumers privately grumbled, but they were then positively aghast when local dealers began to take punitive advantage of the situation by raising prices and focusing only on the highest-profit, highest-spec vehicles. 

It was a win-win situation for dealers – they had less ageing stock to manage, fewer units to service, and thus less infrastructure to maintain. Most of all, they generated higher profits per unit. 

With hindsight, it becomes easy to understand how the Chinese car companies were primed to take advantage of this heady, unstable market.

As Japanese, American and Korean mainstream brands retreated upward, Chinese brands stormed in, offering affordable, well-equipped cars, often well under the crucial AED200,000 mental barrier. 

Where car buyers once preferred to stay in the warm embrace of the models they had bought for generations, today they are tempted by flashy interiors, expansive screens and electronic gadgets, which penny-pinching dealers often denied them. 

And what of the question of the long-term durability of Chinese cars? No one can be sure, but consumer mindsets have undoubtedly and definitively changed.

Where it took years of steady improvements and class-leading products for Japanese and Korean brands to build their reputation, today’s car buyers are willing to gamble on long warranties. If no one keeps their car long enough for durability to truly matter, a cheaper Chinese product begins to make sense. 

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How have the former market leaders reacted? Mostly by conceding the market entirely. While the stock situation has eased, prices remain stubbornly high as brands attempt to protect their inflated residuals. 

At least one manufacturer has essentially waved the white flag on the Middle East by withdrawing its representative office and leaving dealers to handle customers directly. That’s a great strategy when cars are built to the same standards as before the pandemic. Unfortunately, with recalls now bedevilling every carmaker, it’s become evident that quality is no longer guaranteed. 

So what next for the UAE car market? While the high-end luxury space remains Europe-focused, expect the Chinese to make even greater inroads in 2025 as the Japanese, Koreans and Americans watch their market shares diminish. 

They may, arguably, create superior products, but there’s only one country making cars at prices UAE consumers want to pay.

Imthishan Giado is partner at Motoring Middle East