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Light vehicle sales could dip, Automechanika event hears

Four key sector disruptors identified at Automechanika Dubai Network

Four key sector disruptors – technology, new ORMs, Sustainability and a dip in light vehicle sales – have been identified as shaping the future of the automotive with a heightened sustainability focus now shifting the component landscape.

The forecast by Vishal Pandey, Automotive & Mobility Practice, at Glasgow Consulting Group was delivered at the recent Automechanika Dubai Network, a one-day hybrid gathering of the Middle East’s biggest industry players who explored shifts in the global automotive aftermarket industry which is expected to be worth US$529.25 billion by 2028.

Pandey told the gathering that a focus on autonomous driving, connected cars, electric vehicles, and shared mobility is changing the supplier product mix with a new emphasis on e-motor technologies and battery innovations and a shift away from body exterior and engine systems, suspensions, and wheels. He pointed to a rise in new electric vehicle OEMs who are helping generate an uplift in sustainability.

“There’s no question that in the future, suppliers with more sustainable footprints will have an advantage in terms of pricing and margin,” he said while predicting that EVs could exceed 15% of the annual auto market in four years.

The sustainability focus, said Pandey, is likely to lead to new sector growth opportunities with the market for e-motor and battery management systems, battery and fuel cells rising by 42% by 2030.

However, Pandey warned that the sector’s sustainability will only be achieved through collaboration across the entire automotive value chain. “The way the industry is addressing these ongoing challenges is by encouraging more cross-industry collaboration and using advanced technology to increase visibility across the supply chain which is imperative to future success.

“Networks of automotive OEMs and technology companies are also coming together to address industry challenges such as supply chain issues, secure data transfer and management, electrification of the industry including vehicles and charging stations, battery lifecycle management, and sustainable business practices that lead to carbon footprint reductions.”

Pandey also highlighted a decline in light vehicle sales and forecasts the sector may have to wait until 2030 before it regains 2019 sales levels.

Also speaking at the Networking Day was Irfan Tansel, CEO of Al Masaood Automobiles, who looked at current and future mobility trends to watch. According to Tansel, electrification is one of the key industry focal points now; “Electrification is absolutely the next thing that is happening. The industry driver at the moment comes from emission regulations put in place to protect our planet. What is needed to drive this sector forward, especially here in the MENA region, is EV infrastructure and how governments are going to make the shift to reach their individual net-zero goals.

Another driver of increased electric car adoption is affordability. At the moment the electric version of a combustion engine vehicle costs 50% more, and if you add on the cost of installation of charging stations at your home or office, this price only increases. At the moment it is not affordable to a lot of consumers, so investment in research to make EV’s more affordable to the masses is important. If we continue seeing the levels of investment we currently are, I predict mass adoption in the next three to four years”

Organised by Messe Frankfurt Middle East, the Network also heard from Berna Akinci Head of Marketing at Bridgestone Middle East & Africa and Mark Mathias Sales Director at Trinity Lubes & Grease FZE / Grenvo Lubetech Private Limited.

The Network was held ahead of this year’s Automechanika Dubai, the Middle East and Africa’s largest international trade show for the automotive aftermarket industry, which will run at the Dubai World Trade Centre from November 22-24. Automechanika Dubai 2022 will look to build on last year’s hugely successful edition which attracted 20,574 visitors from 129 nations, 578 exhibitors from 47 countries, and 12 official country pavilions.

Mahmut Gazi Bilikozen, Automechanika Dubai’s show director, is confident the show will register further growth this November with the exhibitor survey revealing that 95% of the 2021 participants are planning to return for Automechanika Dubai 2022.

“The product portfolio shifts now impacting the sector are opening huge new opportunities which need to be explored by all involved in the aftermarket segment throughout the region. At Automechanika Dubai, sector players will be able to meet face-to-face with the innovators who are driving sustainability throughout the industry and understand and source the technology, products and systems which will keep them at the cutting-edge of a segment undergoing widespread disruption.

“So, complementing our high 2021 return exhibitor rate, is the strong interest we are receiving from new-to-show and new-to-market innovators looking to gain a foothold into the region. We have currently sold more event space this year than the previous allowing us to add an additional 2 halls. This fills us with high hopes for a bigger and better show with a strong positive growth outlook for the industry as we emerge out of the impacts of COVID-19.”

New sector breakthroughs will be unveiled at Automechanika Dubai 2022’s dedicated Innovation Zone where manufacturers and brands will showcase innovative technology, digital solutions, autonomous vehicles, EV charging stations and components to support the sector’s ongoing transformation. Industry professionals will also be able to meet and network with experts and thought leaders at the Automechanika Academy to explore the latest trends, innovations and changing dynamics in the automotive aftermarket sector.

The event will also host the Automechanika Dubai Awards for Excellence where individuals, organisations, and products across the GCC will be recognised for their outstanding performance, exceptional service quality, sustainability initiatives and achievements.

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