The Price Factor: UAE Car Buyers Prioritize Cost Over EV Trend
In a world increasingly focused on hybrid and electric vehicles (EVs), a recent study reveals that UAE and Saudi Arabia customers still prioritize price as the most crucial factor when purchasing a car.
According to the ‘Global Automotive Study 2023’ by strategy and growth consultants Simon-Kucher, price remains the top criterion driving automotive purchase decisions for customers in both the UAE and Saudi Arabia. While the automotive landscape is evolving globally, these Gulf Cooperation Council (GCC) states still place great emphasis on affordability.
The study delves deeper into the purchasing behavior of automotive customers in the region, highlighting that price-related attributes such as maintenance and energy consumption costs come in second when deciding which car to buy.
Chinese brands on the Rise
While German car brands dominate with an 83% preference in Saudi Arabia, a significant 57% of respondents in the same region expressed openness to considering Chinese-made vehicles. These Chinese automobiles are often known for their competitive pricing, making them an attractive option for cost-conscious buyers.
Interestingly, this trend is not confined to the GCC alone. In Europe, Chinese car manufacturers made significant inroads in the electric vehicle market, garnering a 9% share in 2022, according to forecasts by consultancy Inovev. Carlos Tavares, the CEO of Peugeot-to-Fiat carmaker Stellantis, even described this as a “Chinese invasion” in an interview with Reuters.
Embracing Electric Vehicles (EVs)
Despite the price-driven purchasing behavior, there’s a noticeable surge in interest in electric vehicles across the GCC. The Simon-Kucher report reveals that 72% of Saudi Arabian customers would consider an EV for their next vehicle purchase. In the UAE, an even higher percentage, 79%, expressed a willingness to embrace electric vehicles in the future.
Government incentives and the availability of affordable charging options are key drivers behind this shift in preference. A recent report by evaluation service providers, Compare the Market Australia, highlighted the UAE for its affordability in EV charging infrastructure. The country ranks favorably in both EV charging costs and gasoline prices, making the transition to electric vehicles economically appealing.
Addressing Range Anxiety
While EV adoption is on the rise, range anxiety, the fear of running out of charge before reaching a destination, remains a concern. To combat this, the UAE has launched initiatives to expand its charging infrastructure. Dubai’s utility provider, DEWA, recently unveiled plans to install 1,000 public charging stations in the emirate by 2025, a significant increase from the 620 stations available at the end of 2022. This expansion aims to provide EV owners with more convenient and accessible charging options, alleviating range anxiety.
Moreover, in Abu Dhabi, a state-of-the-art assembly facility has been completed, allowing Dubai-based startup NWTN to establish an integrated production line for its green EV products. This investment signifies the region’s commitment to fostering the growth of electric vehicles.
Embracing Autonomous Driving Technology
In recent years, autonomous driving technology has rapidly evolved, piquing the interest of consumers in the GCC region. The Simon-Kucher report highlights that 80% of respondents in the UAE and Saudi Arabia expressed interest in this technology. However, questions about accountability in case of accidents in autopilot mode linger. Notably, 64% of respondents believed that insurance providers should cover damages, while 33% placed the responsibility on manufacturers. This underscores the need for clear liability frameworks to address potential incidents.
Conclusion | UAE Car Buyers Prioritize Cost Over EV Trend
In conclusion, while the global automotive landscape is shifting towards electric vehicles and sustainability, UAE and Saudi Arabia customers remain steadfast in their price-driven approach to car buying. The emergence of competitively priced Chinese auto brands, coupled with government incentives and infrastructure development, is shaping the future of the automotive industry in these GCC states. As technology advances, embracing electric and autonomous vehicles while ensuring safety and accountability will be key considerations for both customers and the industry at large.
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Posted by Muhammad Fahad
on September 6, 2023. Filed under Car News.
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