Introduction:
As an important country in the Middle East, the United Arab Emirates not only has rich oil and gas resources, but also the world’s third largest re-export trade center and an important player in the automotive market. In recent years, the United Arab Emirates has committed to the layout and industrial development of the new energy vehicle market, and promoted the popularization of electric vehicles through financial incentives and network construction of charging stations. At the same time, the trade in used vehicles in the UAE is also developing rapidly, and Dubai has become an important hub for international second-hand vehicle trading. The trade cooperation between China and the Arab countries in the field of automobile continues to deepen, and the United Arab Emirates has become China’s fourth largest exporter of automobiles.
Part I: Basic Information of the United Arab Emirates
The United Arab Emirates (hereinafter referred to as “the United Arab Emirates”) is located in the southeast end of the Arabian Peninsula, adjacent to Oman in the east, Qatar in the northwest, the Kingdom of Saudi Arabia in the south and southwest, the Persian Gulf in the north and Iran across the sea. With a total area of 83600 square kilometers and a coastline of 734 kilometers, it is composed of 7 Emirate countries.
As of June 2023, the total population of the United Arab Emirates is 10.17 million, and the population is mainly distributed in the Emirate of Dubai, Abu Dhabi, Sharjah, etc. The population of the country accounts for 11.48% of the total population; The expatriate population accounts for 88%, mainly from India, Pakistan, Bangladesh, the Philippines, Iran, Egypt, etc. Nearly 300000 local permanent Chinese are mainly distributed in the Emirate of Dubai and Abu Dhabi.
Based on IMF data, the GDP of the UAE in 2023 is USD 509.2 billion, a year-on-year increase of 3.4%, and the GDP per capita is USD 53500.
The city of Abu Dhabi is both the capital of the United Arab Emirates and the capital of the Emirate of Abu Dhabi. The main economic center cities of the United Arab Emirates include Abu Dhabi, Dubai, etc., and the main industries include oil and gas, trade, finance, tourism, etc.
The UAE is very rich in oil and gas resources, over 95% of which are located in Abu Dhabi. The proven oil reserves are about 15 billion tons, and the natural gas reserves are 7.7 trillion cubic meters, ranking the sixth in the world.
The United Arab Emirates has a well-developed transportation industry, with modern expressways connecting the countries. The UAE has a total length of about 4080 km and road quality is among the highest in the world.
Part II: Foreign Trade Situation of the United Arab Emirates
The UAE is the third largest re-export trade hub in the world and the trade hub in West Asia and North Africa.
China is the largest trading partner of the United Arab Emirates, and the United Arab Emirates is the largest non-oil trading partner of China in Central and Northeast Africa. Based on Chinese customs data, the bilateral trade volume between China and the United Arab Emirates will reach USD 94.98 billion in 2023, a year-on-year decrease of 4.3%, of which the export volume from China to the United Arab Emirates will reach USD 55.69 billion, a year-on-year increase of 22.6%, and the import volume from China to the United Arab Emirates will be USD 39.29 billion, a year-on-year decrease of 27%.
The United Arab Emirates is one of the Middle East countries with the deepest cooperation with China, the widest fields and the most practical results, and an important logistics hub connecting China with West Asia and North Africa. In March 2023, the United Arab Emirates will lift the entry nucleic acid requirements for Chinese tourists and fully implement the visa free policy. In November 2023, the governors of the Central Bank of China and the Arab countries met to renew the bilateral exchange agreement of local currency and reached a five-year cooperation relationship with a scale of RMB 35 billion.
In 2022, the United Arab Emirates is the tenth largest automobile exporter in China, ranking the fourth in 2023, with 38841 exported vehicles and 737.683 million dollars of export volume.
Since 2021, the automobile market in the UAE has been rapidly recovering growth. In 2022, the UAE will sell 224000 vehicles, up 13.0% year-on-year. In the first half of 2023, the sales volume of automobiles will be 134000, up 23.0% compared with the same period of 2021, and the automobile market will grow rapidly.
With the increase of trade between China and the Arab countries and the gradual improvement of China’s automobile product strength and brand strength, the recognition and market share of Chinese-branded vehicles in the United Arab Emirates are gradually increased, a large number of Chinese vehicles are exported to the United Arab Emirates, and the United Arab Emirates will become the fourth largest automobile export target country in China in 2023. In addition to exporting vehicles to the UAE, a number of Chinese automakers have further expanded the UAE’s automotive market by establishing auto plants in the UAE.
Figure 1: Sales of vehicles in the UAE from June 2018 to June 2023
New energy vehicles
The UAE will focus on the transformation and upgrading of the UAE’s automobile industry by expanding the layout of the new energy automobile market and promoting the development of the new energy automobile industry. The United Arab Emirates approved the “National Electric Vehicle Policy” and proposed a series of measures including providing financial incentives for purchasing electric vehicles, investing in the development of the national electric vehicle charging station network, exempting some taxes and charges on electric vehicles, and regulating the electric vehicle market.
As of March 2023, almost a fifth of government agencies in the UAE have replaced official vehicles with electric vehicles. The UAE government says that by 2050, electric vehicles will account for more than 50%. In July 2023, the UAE government issued a national electric vehicle policy to accelerate the popularization of electric vehicles and hybrid electric vehicles, promote the establishment of world-class electric vehicle infrastructure, and develop legislation and technical framework for local recycling of electric vehicle power batteries. In December 2023, the UAE government began to implement the EVIQ plan, planning to launch 5000 electric vehicle charging stations by 2030. As of December 2023, the number of EVs in Dubai has reached 25929, up about 17% year-on-year, according to DEWA.
Part.02
Used car trade
Developed re-export trade in the UAE. Relying on the location and transportation advantages and convenient trade policies of the second largest city Dubai, the United Arab Emirates has become an important international collecting and distributing center for second-hand vehicle trade and a transit center for second-hand vehicle trade. A large number of second-hand vehicles are gathered in Dubai for display, sales and transit.At present, most of China’s second-hand vehicles are exported to the United Arab Emirates in transit trade, and the main target markets are the Middle East, Eastern Europe and Africa, such as Jordan.
Part.03
Used Vehicle Trading
Demand for used cars among local residents of the UAE, particularly young consumers, has been surging due to insufficient new car supply and substantial population growth. At the same time, a large number of used car businesses gathered in Dubai provide a wide range of market options for local consumers and promote the development of local used car circulation in the UAE. In addition, the growing expatriate population and the ease of online sales technology further drive local used car sales.
However, according to algodrive, the overall price of used cars in the UAE will decrease by about 15% in 2023 due to increased migration and the addition of new players in second-hand car trade, which is expected to stabilize with the increase of population.
Used vehicles imported into the UAE must be no older than 10 years, and any older than 10 years requires special permission from authorities (e.g. Dubai Roads and Transport Authority RTA).
Both LHD and RHD vehicles can be imported. RHD vehicles cannot be registered and cannot travel on the road, but can be re-exported.
Vehicles arriving in the UAE must be inspected/assessed by UAE Customs.
The following vehicles are prohibited from import:
✖ Vehicles used as taxi or police vehicles
✖ Vehicle with colored windows (otherwise a fine will be imposed and a satisfactory window will be replaced)
✖ Scrapped Vehicle
✖ Accident car, train passing and water bubble car
Tax policy
Used vehicles imported into the UAE are subject to a 5% tariff and a percentage VAT.
The customs will check the vehicles to verify that the export declaration value is correct and if not, the difference will be paid.
For re-exported used vehicles, customs duty is exempted.
In 2019, in order to further reduce the operating costs of trading enterprises, promote cross-border trade, and improve the convenience of enterprises to carry out business in Abu Dhabi (port), the Abu Dhabi Executive Committee decided to cancel the charge of 1% of the value of the goods when refunding the temporary import security deposit, and to change to a unified charge of transshipment fee of 50 dirhams.
Documents required for import
Original bill of lading: including brand, model, VIN number, engine number, color and vehicle type, etc.
Export certificate (ownership certificate)
Purchase/commercial invoice
Copy of passport
Copy of UAE residence permit or visa page (signature on passport)
Authorization letter (the customer will obtain after the vehicle arrives in Dubai)
The name in the vehicle ownership certificate shall be the same as the name in the visa
Insurance policies
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Hiking is looking forward to cooperation and win-win going abroad
Qingdao Hiking Automobile Trading Co., Ltd. is one of the first batch of pilot enterprises for second-hand automobile export in China. The Company has a registered capital of RMB133 million, which is an exclusive company established by Hiking Group for the purpose of developing second-hand vehicle export business, and belongs to Shandong Hiking International Co., Ltd. (600735), a A-share listed company. The main business of the Company is to integrate the upstream and downstream resources of automobile export at home and abroad and provide one-stop supply chain supporting services in the whole process, aiming at building a comprehensive service platform for automobile export in China and assisting the development of automobile export in China.
Hiking automobile export models include fuel vehicles and new energy vehicles, covering various models of passenger vehicles, commercial vehicles, engineering machinery and other major brands, and has established its own network channels in the world; The export regions mainly include the countries of Shanghai Cooperation and the countries and regions along the Belt and Road, and are exported to Japan, Belgium and other developed countries. The company has set up branches in Japan, Korea, Shanghai Cooperation and other countries and regions, and invested in second-hand vehicle companies (CAR) listed on the Tokyo Stock Exchange of Japan, with rich overseas procurement and sales channels; At the same time, we have deepened cooperation with major engine plants and second-hand vehicle dealers in China, and established our own vehicle source system and second-hand vehicle export inspection standard system.
