A market survey of 1,250 auto aftermarket professionals conducted days before this year’s Automechanika Dubai reveals CASE (Connected, Autonomous, Shared, Electric) mobility is already happening in a big way or will dominate the market in the Middle East within the next five years.
Held in May, the Automechanika Dubai Market Outlook survey suggests that despite this enormous change in direction for their industry 67% of respondents feel their companies are ready to face the changes that will inevitably arrive in the future, compared to 55% of the 1,300 respondents to the same question one year ago.
In fact, global auto aftermarket professionals believe they’re more ready now than they were one year ago for imminent market changes, as new technologies, economic climate, and government policy play key roles in how the Middle East auto services industry will look in the next five years
Answered by distributors, manufacturers, importers, exporters, wholesalers, retailers, consultants and service providers, the survey showed that while technology is still the chief reason for change in the next five years, political and economic scenarios will have a bigger role to play. When asked what would be the reasons for future change in the Middle East auto aftermarket, 64% of respondents in 2019 cited change in automotive technology, versus 74% in 2018.
Meanwhile, 48% of respondents in 2019 believed that regular political and economic improvements or slowdowns will be the chief factors driving change in the next five years. This is six percentage points higher than in 2018, indicating external factors beyond the industry’s control might have a bigger say in how the aftermarket looks in the future.
“The Automechanika Dubai Market Outlook is an annual survey we conduct every year to ascertain the current situation in the regional aftermarket, where it’s headed, and where the potential opportunities are in the Middle East,” said Mahmut Gazi Bilikozen, Show Director for Automechanika Dubai.
“It’s clear that the automotive industry, and the aftermarket as a result, is undergoing a rapid transformation, but it’s a positive indicator that industry professionals appear more confident their businesses can still survive and ultimately be more successful in a market that will no doubt look very different in years to come.”
Presented at Automechanika Dubai’s Innovation Zone, the survey shows that the perception that electric vehicle technology will challenge petrol and diesel the most has increased year-on-year, with 51% of respondents believing electric cars will be the chief challenger to the internal combustion engine, compared to 47% in 2018. Confidence in hybrid and hydrogen cell vehicles as the big challengers appears to have waned slightly year-on-year.
Tellingly, more than two thirds of the survey (68%) agreed that CASE mobility is re-shaping their industry, a figure which is 12 points higher than in 2018 (56%).
More than half (55%) also say they would expect to see Return on Investment (RoI) in alternative fuel vehicles repair equipment in five years if they were to invest in it, while a further 35% say RoI would be seen within two years.
But while 55% of respondents in 2019 (no change from 2018) indicated that customers had started approaching them for products and services for non-petrol or diesel engines, 61% of garage or workshop respondents had not yet invested in new equipment for electric vehicles. A further 35% said that, while they know what equipment would be needed, it was still too early to make this investment.
Respondents were also asked for their thoughts on which key aftermarket product groups would face the most disruption in the Middle East in the coming years, these comprising Parts & Components; Electronics & Systems; Accessories & Customizing; Repair & Maintenance; Car Wash, Care & Reconditioning; and Tyres & Batteries.
There was very little movement year-on-year in what product groups respondents perceived would face the most disruption. Parts & Components – the heart of the internal combustion engine – would face the most disruption in the next five years according to 56% of the survey sample in 2019, a slight drop from 59% in 2018.
This was followed by Electronics & Systems (37% in 2019, 35% in 2018), Repair & Maintenance (36% in 2019 and 2018), Accessories & Customizing (27% 2019; 26% 2018), Tyres & Batteries (23% 2019; 25% 2018), and Car Wash, Care & Reconditioning (12% in 2019; 14% 2018).