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Photograph: Ashok Leylands Bus Assembly plant in RAKIA Industrial Park in Ras Al Khaimah (UAE)
December 2009
Contents
Executive Summary Introduction The Changing Nature of Global Manufacturing The Changing Nature of Supply Chain Global Automotive Production & Major Players Automotive Production in the Middle East GCC Automotive Sector GCC Economic Outlook-Macro-economic Indicators GCC Macro-economic Indicators GCC Auto Industry SWOT Outlook for GCC Automotive Sector GCC Competitive edge Vehicle Assembly in GCC GCC Source of imports GCC Highlights-Foreign trade in Automotive sector UAE Automotive Sector UAE Auto Industry SWOT UAE Economic SWOT UAE Business Environment SWOT UAE Automotive Sector trade Automotive Manufacturing in UAE Low cost and Luxury car market in UAE Used Car Market in UAE After- sales Business in UAE Car Rental Market in UAE Rationale for setting up projects in RAK Identified Projects UAE Auto Industry Forecast Scenario Automotive Products & Free Trade Agreements About Ras Al Khaimah About RAK Investment Authority References Annexure
I II III IV V-A V-B VI-A VI-B VII VIII IX X World Motor Vehicle Production By Country And Type In 2008 World Ranking of Vehicle Manufacturers In 2008 UAE Imports & Re-exports of Vehicles in value term List of Automobile Component Manufacturers in GCC UAE Trade figures on components 2006-1008 In value term UAE Trade figures on components 2006-1008 In Numbers UAE Trade on Tyre & Tyre Products-2008 UAE Trade on Tyre & Tyre Products-2007 Key Global Tyre Manufacturers Contact Details UAE Trade on Vehicle Battery (Accumulators)-2006-2008 UAE Trade on Electrical Ignition System-2006-2008 List of UAE car dealers
3 6 8 10 12 13 13 15 16 17 19 19 21 22 23 23 24 31 33 35 36 37 38 38 54 56 57 59 64 65 66 67 68 70 71 72 73 74 75 76 77
References..
1. Hiromi Oki, Where intraregional trade in East Asia is heading, JETRO Research Paper Vol. 06, 2008, 2. Changing Features of the Automobile Industry in Asia Asia-Pacific Research and Training Network on Trade Working Paper Series, No. 37, July 2007 3. Dubai Chamber of Commerce Economic Bulletin, vol-4, issue35, May 2007 4. OICA Statistics on global motor vehicles production 5. Trade Statistics-2008, Dubai Port & Customs, Dubai World 6. BMI report on UAEs Auto sector 2009 7. GOIC report on sector study on Automotive Industry in GCC 2009 8. Dubai Chamber of Commerce Economic Bulletin, vol-4, issue35, May 2007 9. Dow Jones Factiva database of compaies. Websites: http://www.researchandmarkets.com /reports/ http://www.worldbank.org http://www.unido.org http://www.gulfnews.org http://www.khaleejtimes.org
Executive Summary
As automobile industry is becoming more and more standardized, the level of competition is increasing and production base of most of auto-giant companies are being shifted from the developed countries to emerging markets in developing countries, to take the advantage of low cost of production. Thus, many developing countries are making serious efforts to grab these opportunities. The share of developing countries in global exports of passenger motor vehicles increased from 11 per cent in 1999 to 18 per cent in 2006. Emerging markets will contribute about two thirds of the growth in global light vehicle assembly between 2006 and 2014.
Highlights
The share of developing countries in global exports of passenger motor vehicles increased from 11 per cent in 1999 to 18 per cent in 2006. Global production of passenger cars and commercial vehicles grew at a rate of 4to 5% between 2002 and 2007. In 2007 the world production of automotives reached 73.27 million units In 2008 the production fell by -3.7% due to global recession. Out of this 75% was car and balance commercial vehicle About 69% of the total production was limited to top 10 companies. In the Middle East, Iran and Egypt are the two main producers of automotives. Approx.1.1 million units were produced in 2007 at a CAGR of 12.4%.
Global
Highlights
There is no significant manufacturing of Vehicles. Manufacturing is limited to a few assembly lines for bus and trucks. Saudi Arabia and the United Arab Emirates (UAE) are the two high- consumption markets within GCC 4-5ml passenger cars in the GCC, out of which 1.4million are in UAE UAE constitutes about 30% (2007) of the total GCCs demand. No significant manufacturing of vehicles except some assembly lines. In 2008 GCC imported 1.2 ml vehicles. About 80% constitutes passenger car and rest trucks & buses. The growth in terms of value of imports of vehicles in GCC was @ 22% with $24.14bl of imports in 2007. Japanese automobiles dominate the GCC auto market with 60.98%, while the rest of the pie was shared by Korean brands at 13.78%, American brands at 10.15%, and European brands at 8.20%. There is no significant manufacturing of components. A few small scale manufactures are the active and catering to the requirements of aftermarket. The value of import of new tyres has gone up from USD 817 million in 2003 to USD 1.3 billion in 2007 (CAGR 12%). 3
GCC
The supply chain of auto industry has completely changed over the years. Major OEM (original equipment manufacturer) players world-wide are increasingly focusing on basic design and assembly operations as well as servicing the after-sales market and prefer to deal with a smaller number of large suppliers. Consequently, the supply chain is morphing into sub-system integrators, component makers, and commodity players. With the gradual opening up of the component sector, now the challenge is for individual governments to support the development of domestic critical component and subsystem suppliers through, interalia, improvement in the investment environment, stronger patent regimes and incentives for R&D. Free trade agreements can have important implications for the automotive sector because of the improved access (addressing both tariff and non-tariff barriers) which they can provide and because of the reduction in tariffs which
can occur under them. Modern agreements typically also cover a wide range of issues other than tariffs and these can be relevant to trade in automotive products or services. Global production of passenger cars and commercial vehicles grew at a rate of 4 to 5% between 2002 and 2007. In 2007 the world production of automotives reached 73.27 million units. In 2008 however, the production fell by 3.7% due to global recession to 70.53 million consisting of 52.6 million (75%) cars and 17.9 million (25%) commercial vehicles. About 69% of the total production was limited to top 10 companies. This level of output was equivalent to USD 2.8 trillion. It employed over 8 million workforce directly and five times as much indirectly. Thus nearly 50 million workforce depend on auto industry for their livelihood. Middle East in general and Gulf Cooperation Council (GCC) in particular is a fast growing market for automotive industry. The region has a high ratio of cars per household. GCC countries with their high GDP is a high consumption vehicle market and present enormous untapped opportunities for the manufacture of vehicles and its components. The combination of relatively high living standards, a growing population in the region, as well as favourable oil prices, have been the key driving forces behind the growth in the auto sector in the region. Despite an expected slowdown in auto sales during 20082009, the outlook based on resurgence in consumer demand on the back of a pick-up in the global economy is likely to lead to robust growth in 2010 and beyond. Whilst the GCC (Consisting of UAE, Saudi Arab, Kuwait, Oman, Qatar and Bahrain) does not possess a sizable domestic automobile manufacturing, its high national wealth has created a niche market for sales of imported vehicles in recent years, and there is a large reexport trade based on the countrys regional status as a key strategic location, With almost 4m passenger cars in the GCC, out of which 1.4million are in UAE; this region offers opportunities for car parts and accessories distributors, retailers and the aftermarket industry, in general, a huge opportunity to enter a market least affected by the current credit crunch. Saudi Arabia and the United Arab Emirates (UAE) are the two highconsumption markets within GCC and present enormous and untapped opportunities for automotive manufacturers.. In 2008 total imports in this sector in UAE was $16.9bl. of which 77% was imports and balance re-exports. As regards the 2008 distribution of total trade within this sector by activity, motor vehicles accounted for 68%, followed by auto component 24% and tyre was 8% respectively.
GCC
Import of auto components too have shown a healthy double digit growth. Main components are: tyres, mounted brake components, gear boxes, drive axle, components, mufflers and exhausts, automotive spring (leaf and helical),glass, lead acid batteries and accessories such as car radios and air conditioners. The individual import figures of major items have been given in the report.
Highlights
United Arab Emirates (UAE) There is no significant manufacturing of vehicles. Manufacturing is limited to a few assembly lines for bus and trucks. In 2008 total imports in the automotive sector in UAE was approx. $16.9bl. of which 77% was imports and balance re-exports. As regards the 2008 distribution of total trade within this sector by activity, motor vehicles accounted for 68%, followed by auto component 24% and tyre was 8% respectively. UAE trade of component and accessories in 2008 were $2.8bl out of which 29% was re-exported. The major source of imports being Japan, Germany, USA and China The top destinations (Re-exports) of motor vehicle parts and components are Iran, Russia, Iraq, Libya and Tanzania respectively. The major items of imports are Bumpers & parts, Suspension shock-absorbers, Parts & accessories for bodies, Clutches & parts, Brakes and servobrakes, Road wheels & parts & accessories and Steering wheels, columns & boxes
Despite the size and potential of the UAE market and its strategic location and well developed logistic support system, the emirates still have no significant passenger car assembly or manufacturing operations, although this is set to change in coming years. The presence of even a car assembly line in UAE would open the way for a local tie-up with a foreign car manufacturer seeking to tap into growing demand for low-cost cars in Africa, the Middle East, and Asia. The UAE has also been making strategic investments in European auto firms, which could pave the way for building up a domestic industry. Leading the investment has been Abu Dhabis Aabar Investment, an Abu Dhabi investment fund, bought a 9.1% stake in German autos company Daimler in March 2009. Swedish automaker Scanias and Indias Ashok Leyland have set up their trucks and bus assembly units in UAE. However, considering the potential, the manufacturing in this sector is insignificant and presents enormous untapped opportunities for the manufacture of vehicles and its components One of the strategies of UAE has been to promote industrialization away from oil and gas based industries in order to ensure a stable broad based economy for a balanced growth in the medium to long term. Automotive industry is an ideal investment scenario. Besides saving expensive imports, it tends to drive all-round development by investing in R&D, developing ancillary industries and generating employment opportunity for the local population. UAE has taken a number of steps in broadening the industrial base away from oil and gas. The competitive edge of the UAE lies in its excellent infrastructure such as roads, sea ports, power and telecommunication and geographical proximity to MENA, Europe and Asian markets. Apart for this, UAE has a stable government and sound macro-economy; high per capita GDP & high standard of living. Fiscal Benefits include 100% income and corporate tax exemptions, 100% capital and profit repatriation, fully convertible currency, no financial risk and relatively low Inflation. Regulatory benefits include 100% ownership in Free Zones, no trade barriers or quotas, easy licensing procedures & company formation, liberal labour laws and no restrictions on hiring expatriate. All these contribute to lower cost of operations.
Identified Projects for RAK (UAE) Based on import substitutions of major components Car/ bus/ trucks assembly/ manufacturing unit Tyre & Battery manufacturing units Auto components manufacturing units of both metallic and plastics particularly, Bumpers & parts Suspension shock-absorbers Parts & accessories for bodies Clutches & parts Brakes and servo-brakes Road wheels & parts & accessories, Car Air conditioners Automobile ignition system
Rationale for Setting up Project in RAK (UAE) Competitive Landscape e.g. Benefits
100% income and corporate tax exemptions 100% capital and profit repatriation, Fully convertible currency 100% ownership in free zones Exemption of equipment and raw material required by industrial units from customs duty. No trade barriers or quotas, Easy licensing procedures & company formation, Liberal labour laws No restrictions on hiring expatriate.
Sound Macro-economy & favourable Govt. policies Excellent infrastructure and logistic support system Increasing demand for vehicles and components Strategically located Base for Raw materials- Aluminium, Plastics and float glass
Aluminium -DUBAL (Dubai) Plastics-ADNOC(Abu Dhabi), SABIC (KSA) Glass- Guardian (RAK), Emirates Float Glass Dhabi)
(Abu
Introduction
The automotive sector, comprising of the automobile and auto component sub sectors, is one of the key segments of the economy having extensive forward and backward linkages with other key segments of the economy. The automotive industry is no stranger to change. Many of the changes occurring in the global marketplace today - tightened credit markets in a capital-intensive industry, declining consumer confidence, increased government involvement - are the most recent manifestations of this reality. The combination of these new realities with familiar industry challenges such as volatile raw materials costs and fuel prices, tighter regulations, capacity and sourcing challenges and the need to satisfy consumer demand for cleaner, greener cars, have combined to create a business environment that has had a profound effect on the global automotive industry. With the global economy in the midst of its worst recession, cash conservation has been the key element to survival for many automotive companies. However, to survive and prosper successful companies still have to invest for the future. The silver lining for the auto industry is that the price of oil is set to remain softer during this global downturn, as are commodity prices. Some experts feel the global slowdown in the auto sector, although harsh, will not be as pronounced as that during the recession of the early 1990s thanks to the strength of the BRIC nations (Brazil, Russia, India, and China).
The Changing Nature of Global Manufacturing and Trade in Automotive Products and Services
As automobile industry is becoming more and more standardized, the level of competition is increasing and production base of most of auto-giant companies are being shifted from the developed countries to developing countries to take the advantage of low cost of production. Thus, many developing countries are making serious efforts to grab these opportunities. Auto-giants such as General Motors, Ford, Toyota, Honda, Volkswagen, and Daimler Chrysler, to shift their production bases in different developing countries which help them operate efficiently in a globally competitive marketplace.
Different countries adopted different policies to handle the overcapacity problem in the sector. Specialization in automobile sector is increasingly becoming segment specific as each of these countries is finding its niche. For example in the emerging markets e.g. China is specalising in components, India in two wheelers and small vehicles, Thailand in pick-up trucks and passenger cars and Indonesia in utility vehicles. Thailand is exporting to developed countries and strengthening its position in ASEAN. Indonesia is also increasing its trade relation with ASEAN. India is concentrating on Middle East and south Asia beside traditional developed country destinations. With the gradual opening up of the component sector, now the challenge is for individual governments to support the development of domestic critical component and sub-system suppliers through, interalia, improvement in the investment environment, stronger patent regimes and incentives for R&D. 6
As with other industries, reductions in trade barriers and lower shipping costs, among other factors, have led to changes in the global automobile industry. These changes include increased demand for and production of vehicles in developing countries; the adoption of more globally focused strategies by major automotive producers (of both vehicles and parts); the development of integrated supply chains, including the use of e-commerce; increased involvement by suppliers, including in the development, manufacture and bearing of risk; greater diversity of roles among suppliers, ranging from specialist suppliers to component integrators; and highly specialised trade in vehicles and components. These changes have resulted in significant restructuring within the industry, particularly among parts manufacturers, with first-tier suppliers typically operating on a global basis.
According to JETRO data, the share of developing countries in global exports of passenger motor vehicles increased from 11 per cent in 1999 to 18 per cent in 2006. Papers released for the Review suggest that emerging markets will contribute about two thirds of the growth in global light vehicle assembly between 2006 and 2014 . The papers also note that the automotive components industry is becoming increasingly global, with many companies now having a production network of well over 20 locations around the world. Manufacturing services, such as design and research and development are increasingly performed on a worldwide basis. 7
In some respects, however, the motor vehicle industry has not changed as much as other sectors. In contrast to the information, communications and telecommunications industry, where tariff barriers are mostly at zero as a result of the WTO Information Technology Agreement, regional and global production networks remain less significant. This is reflected in the patterns of trade - in East Asia external trade [i.e. primarily export of assembled vehicles] is greater than intra-regional trade [of both vehicles and parts] and in investment patterns, as countries, remain focused on getting behind tariff barriers rather than efficiency-seeking production. While these factors have all operated to reduce the opportunities for the significant growth of production networks, the experience of other industries suggests that, as barriers are reduced further - through unilateral action and bilateral, plurilateral and multilateral agreements - intra-industry trade will increase, bringing with it opportunities in particular for trade in specialised parts and vehicles.
The components industry is now increasingly concentrating in companies that can design and provide systems and subassemblies across different markets. Several supplier companies were created by assemblers. In fact, in-house component manufacturing division were given separate identities and encouraged to compete with other companies. For example, Delphi was created out of GMs component activities. Similarly, Visteon (formerly part o f Ford), Magneti, Marelli (Fiat) and ECIA (formerly owned by Peugeot-Citroen and now fused with Bertrand Faure) were also created in the similar line. M&A activities among suppliers also became a common feature in 1990s. Lucas and Varity merged in 1996, T&N was taken over by Allied Signal; Bertrand Faure was acquired by ECIA. New global companies were created through the fusion of smaller manufacturers also. In Asia-Pacific region, the growth of component manufacturers has taken a different route. Most of the Japanese producers followed a tight relationship with their suppliers (independent or quasi-independent). The existence of the keiretsu system (business affiliation) in Japan greatly facilitated such an arrangement. But other manufacturers especially Korean, Chinese and Indian gave lot of importance on price and quality while buying from number of trusted suppliers. As a result of this indigenous auto-component sectors are thriving in many Asian countries though some MNCs are also present.
Quantity
60.66 64.50 66.48 69.22 73.27 70.53
2003
2004
2005
2006
2007
2008
According to Fig. 1 above, world production grew at a rate of 4% between 2002 and 2007. In 2007 the world production of automotives reached 73.27 million units. In 2008 however, the production fell by -3.7% due to global recession to 70.53 million consisting of 52.6 million (75%) cars and 17.9 million (25%) commercial vehicles ( Fig-2).
Category wise distribution of 2008 production in million units Commercial Vehicles 17,889,325
Cars 75%
10
World Motor Vehicle Production By Region In 2007-2008 in million units Region 2007 2008 % Change
Europe CIS NAFTA South America Asia-Oceania Middle East Africa Total 20,834,089 2,018,489 15,454,764 3,699,295 29,717,618 1,101,713 440,093 73,266,061 19,590,808 2,179,977 12,974,058 3,942,457 30,204,954 1,166,212 468,065 70,526,531 -5.90% 8.00% -16.10% 6.60% 1.80% 5.80% 7.00% -3.7%
CIS 3%
Auto industry produced over 70 million vehicles in 2008. About 69% of the total production was limited to top 10 companies. This level of output was equivalent to USD 2.8 trillion. It employed over 8 million workforce directly and five times as much indirectly. Thus nearly 50 million workforce depend on auto industry for their livelihood.
11
In the Middle East, Iran and Egypt are the two main producers of automotives in the region. Production of automotives in the Middle East is shown in Fig.4 According to this, the production of automotives increased from 0.88 million units in 2005 to 1.1 million units in 2007 at a CAGR of 12.4%.
Total
881,749 996,018 1,101,713 1,166,212
% change
12.96% 10.61% 5.85%
12
as well as banks
Banking services are a leading private sector activity in the Gulf region, contributing between 4-12% of the regions GDP, despite the large share of the oil sector. However, the financial results of most banks across the region during the first half of 2009 show a drop in profits relative to the same period of last year. At any rate, GCC banks have always been among the strongest and safest banks in the region according to most financial indicators, including capital, profitability, government backing, and prudent risk management. It is believed that GCC banks have drawn the proper conclusions, like others around the globe, and should remain healthier and in better shape than banks in other emerging economies. 2010 is expected to see the resumption of growth in bank intermediation, though at a slower pace than in previous years.
CPI (Average %)
UAE Saudi Arab Qatar Kuwait Bahrain Oman
Population (m)
UAE Saudi Arab Qatar Kuwait Bahrain Oman
Source- Deloitte Touche Tohmastu- Report on GCC macro-economy indicators, E-Estimated; F-Forecast 14
Strengths The regional economy is still liquid with strong current account balances which will sustain growth under the present depressed economic conditions for some time. High business confidence and an increase in disposable income provide a favorable background for the automotive sector. The SUV and luxury car markets are strong and growing on the back of rising levels of young drivers and disposable income Fuel prices are the lowest in GCC GCC has potential to become a base for aluminum and plastics based industry due to availability of raw materials locally. This in turn can be developed into a base for aluminum and plastic based auto component industry There is no local production of passenger cars in GCC and only a small number of commercial vehicles are assembled.
Weaknesses The domestic market is largely dependent on international car manufacturers for their style and design, and hence its profitability is hostage to the demands of those major suppliers. Lack of awareness of automotive quality standards
Opportunities Threats A potential threat exists if other regional suppliers (Egypt, Turkey, Iran and possibly, India) become competitive in a wider range of vehicles. But this threat is not significant to the luxury vehicle market. The used car market is expanding. This will help boost spare parts demand locally. As a result of climatic conditions and a rugged terrain, there is a vibrant and growing market for accessories and spare parts Trade liberalization between the Gulf Co-operation Council (GCC) states and the EU will open regional markets to more European imports Plans for a car assembly plant could help spawn a local automotive ancillary manufacturing industry. Proximity to markets in MENA region and hence potential for export
15
Whilst the GCC ( Consisting of UAE, Saudi Arab, Kuwait, Oman, Qatar and Bahrain) does not possess a sizable domestic automobile manufacturing, its high national wealth has created a niche market for sales of imported vehicles in recent years, and there is a large re-export trade based on the countrys regional status as a key strategic location, The current global financial crisis does not seem to have affected GCC vehicle market significantly according to market analysts. Major economies such as Saudi Arabia and UAE are still growing though at a reduced pace during the slow down phase of global economies. Experts feel the impact will be significant only if the oil price remains subdued for a longer duration. Reported research show that the Japanese automobiles dominate the GCC auto market with 60.98%, while the rest of the pie was shared by Korean brands at 13.78%, American brands at 10.15%, and European brands at 8.20%. With almost 4m passenger cars in the GCC, out of which 1.4million are in UAE; this region offers car parts and accessories distributors, retailers and the aftermarket industry, in general, a huge opportunity to enter a market least affected by the current credit crunch. Automotive market in GCC is buoyant. According to one industry estimate, GCC imported 1.2 million vehicles in 2008. Analysts feel the automotive sector in GCC is growing at an impressive rate of over 10% annually. The growth in terms of value of import of vehicles into GCC is given in Fig.5. Overall, the dollar value of imports has grown at an impressive rate of 22% CAGR.
GCC- Highlights
Higher per capita income, growing population and low fuel cost are driving the demand for automotives in GCC. This has led to a rapid development of an automotive market here. In spite of the current downturn in the world financial market, auto market in GCC is very strong. GCC imported 1.2 million vehicles into GCC in 2008. 80% of these are cars. Saudi Arabia and UAE are two prime markets in GCC leading the way. Import of vehicles is growing at a rapid rate in GCC. The growth rate is in excess of 10% per annum between 2003 and 2007. The Automotive component industry too has shown a double digit growth rate. Large number of used cars on road and inclement road and weather conditions are fueling the demand for spare parts. Based on import data, import of vehicles into GCC grew from USD 10.75 billion in 2003 to USD 24.1 billion in 2007. This is equivalent to 22% CAGR. Import of auto components too have shown a healthy growth rate. Main components are: Tyres, Mounted brake components, Gear boxes, Drive axle, components, Mufflers and exhausts, Automotive spring (leaf and helical),Glass, Lead acid batteries and Accessories such as car radios and air conditioners. In the case of vehicles, apart from a handful of truck and bus assembly units there is no serious automotive manufacturing activity in GCC currently. GCCs entire demand for cars are met through import. In the case of tyres too there is no manufacturing unit in GCC. In the case of components, there are manufacturing units, currently producing these items in the GCC. But majority of them supply to aftermarket only.
2007
1.11 19.42 3.61 24.14
2006
0.72 14.91 2.10 17.73
2005
0.62 12.06 1.70 14.38
2004
0.49 9.61 1.55 11.65
2003
0.55 8.40 1.78 10.74
16
Fig-5 Growth in import of vehicles into GCC Saudi Arabia and the United Arab Emirates (UAE) are the two high- consumption markets within GCC and present enormous and untapped opportunities for automotive manufacturers. The total automotive market in GCC can be broadly divided into the passenger cars (including SUVs), trucks, and buses.
2006
224 6,700.00 923 7,847.00 17,730.00 44%
2005
315 6,305.00 1,172.00 7,791.00 14,386.00 54%
2004
247 4,274.00 862 5,384.00 11,646.00 46%
2003
263 3,283.00 9,61.0 4,507.00 10,748.00 42%
As can be seen from above Table, the share of Saudi automotive market has declined over the years to 36% of GCC market in 2007.The passenger car segment is the largest and the most important segment of Saudi auto market and contributed around 80% of the total vehicle sold in Saudi market in 2007. Toyota is the leading market brand in the Saudi Arabia, followed by Nissan. Daimler is the leading automotive firm in the commercial vehicle market. The German company operates through the Mercedes-Benz brand. In 2004, Japanese cars captured approximately 36% of the Saudi market with Toyota topping the list with 29.5%. US manufacturers were 17
the other prominent manufacturers with 25% market share with GM leading the pack from American suppliers. Popularity of Australian Built cars is on the rise and sales have improved dramatically since 2006. Car rental services and limousine services are among the largest buyers of passenger cars in Saudi Arabia. Majority of car purchases were made through local suppliers although some governmental agencies such as Saudi Arabian National Guard (SANG), the Ministry of Defense and Aviation (MODA) and the Ministry of Interior (MOI) are believed to purchase directly from overseas suppliers.
Mercedes group
National Automotives Industry, Jeddah, operates a truck assembly company in partnership with Mercedes group Germany. The plant is designed and run by Mercedes. Components are imported in CKD condition and assembled here.
The plant has a capability to assemble 15-20 trucks per day to make trucks of 20Ton capacity. Products of this company is sold in GCC as well as exported. Demand for the truck is very strong. This is indicated by the expansion drive of Mercedes.
Volvo Group
Volvo Vehicle truck assembly, Jeddah was set up as a joint venture between Zahid Tractors, the sole distributor of Volvo vehicles and Volvo Group of Europe. The plant assembles Volvo trucks from CKD units. The plant has a capacity to assemble 18 trucks per day. However, their current production level is 2 -3 trucks per day. In January 2009, MAN, together with its Saudi Arabian partner Haji Husein Alireza & Co. Ltd., opened a truck assembly plant in Jeddah.
MAN
The plant is designed to produce 3,000 vehicles a year in single-shift operation. It assembles MAN TGA-WW trucks and semi-trailer tractors, initially for the local market. In 2007, MAN's share of the market for trucks over 16 tons was 22.7%. In summary, automotive demand in Saudi Arabia is largely met through imports. The car import is tightly regulated by the authorities. Prior to 2003, the government set a fixed gross profit margin of 15% for car importers. The ending of this policy in 2003 stimulated further growth in the market. Nonetheless, until 2005, when the country finally gained entry to the World Trade Organisation, the Saudi Seaports Authority continued to impose a fixed customs duty, insurance and freight charge on each vehicle imported into the country. Motor vehicles are currently subject to a 5% customs tariff. Imported cars are sold through sole distributors who also provide after-sales service. There is greater competition, however, in the market for spare parts. Sizeable volumes of automotive imports are re-exported to neighboring countries such as Sudan, Yemen, Djibouti, Ethiopia and Eritrea.
18
There are over 350 dealers for supplying automotive parts in Saudi Arabia.U.S. companies command a leading position in the supply of transmission, steering, suspension, and braking components and parts. Nonetheless, Japanese car manufacturers and spare parts suppliers still command the lion share of the Saudi market at more than 40 %.
UAE Market:
UAE automotive import market is given in Table next page. As can be seen from this table, UAE market constituted 30% of the GCC total. The major suppliers in UAE auto market are Toyota, Nissan, Mitsubishi, Honda, Mercedes, BMW, Volkswagen, Ford and General Motors.
19
2004
113.00 2,451.00 177 2,741.00 11,646.00 0.24
2005
134.00 3,183.00 142 3,459.00 14,386.00 0.24
2006
244.00 3,923.00 371 4,538.00 17,730.00 0.26
2007
387.35 6,017.88 956.52 7361.75 24,141.00 30%
2008
766.19 7,307.52 1113.13 9,186.84 N/A
The automotive component segment is also growing rapidly in UAE. In 2008, the UAE automotive parts and accessories market was estimated to be worth approximately $2.83bl. About 29% of the auto parts and accessories that have been imported are re-exported to other countries. Auto components are among the top 10 re-export products of UAE. The main destinations of these re-exports are Middle East, Africa and East Europe. The main sources of the imports are Japan, Europe and the US. UAE market for automotive parts is open and highly competitive. Like Saudi Arab, UAE automotive component market remains an import driven market. There are few companies manufacturing fast moving automotive parts a list of those major companies has been attached in Annexure-4. Supply of spurious components is the main threat affecting this sector.
A detailed analysis of UAE Auto sector has been given separately in subsequent chapters.
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Import to GCC
In terms of USD, the value of net import of vehicles have grown from USD 10.7 billion in 2003 to USD 24.1 billion in 2007. This corresponds to a CAGR of 22%.
Import of Tyres
The value of import of new tyres has gone up from USD 817 million in 2003 to USD 1.3 billion in 2007 (CAGR 12%). In terms of weight of new tyres imported, the net import rose from 340,000 tons in 2003 to 433,000 tons in 2007. The CAGR in terms of weight is approximately 6%. Import of mounted brake components rose from1,121 ton (USD 12.0 million) in 2003 to 11,558 ton (USD 81.0 million) in 2007 (CAGR 79%). Import of leaf springs rose from 7,300 tons in 2003 to 13,300 tons 2007 (CAGR 16%).Import of helical springs rose from 2,200 tons in 2003 to 3,500 tons 2007 (CAGR 12%).
3 4
Import of oil and fuel filters rose from 8,960 tons (USD 51million) in 2003 to 13,460 ton (USD 102 million) in 2007 (CAGR 11%). Import of air filters rose from 3,226 ton (USD 37million) in 2003 to 8,930 ton (USD 103 million) in 2007(CAGR 29%). Import of toughened safety glass (tempered) rose from 870 tons (USD 8.3 million) in 2003 to 3600 ton ( USD 30.0 million) in 2007(CAGR 43%). Import of laminated glass rose from 1,900 tons (USD 10.4 million) in 2003 to 5,240 ton (USD 35.8 million) in 2007(CAGR 30%). Import of car air conditioners rose from USD 5.6 million in 2003 to USD 7.6 million in 2007(CAGR 8%). Import of car radios rose from USD 22 million in 2003 to USD 24.5 million in 2007(CAGR 2%). Import of lead acid batteries has gone up from USD 65.7 million in 2003 to USD 97.4 million in 2007.This corresponds to an increase of 10%. Import of muffler and exhausts rose from USD 9.5 million in 2003 to USD 18.5 million 2007(CAGR 18%).
Import of accessories such as car radios and car air conditioners Import of lead acid batteries Import of mufflers and exhausts
8 9
10 Import of Transmission Import of gear box has gone up from 3,440 ton (USD 29 million) in 2003 to 4,480
components (gear box and drive axles) ton USD 55 million in 2007 (CAGR 7%). mport of drive axle components has gone up from 3600 tons (USD 20 million to 15,370 ton (USD 84 million) 2007 (CAGR 45%).
The luxury car market is strong and growing on the back of rising levels of disposable income Investment in European auto firms lays the foundation for future partnerships
Weaknesses
The competitive edge of the UAE lies in the following aspects: Resilient economies High per capita GDP High standard of living Reasonably low inflation 100% tax exemptions with no personal, corporate, value added or withholding tax 100% ownership in free zones 100% repatriation of profits No restriction on hiring of expatriate workers Stable Government Excellent infrastructure such as roads, sea ports, power and telecommunication Geographical proximity to MENA, Europe and Asian markets Low cost of operation (in RAK) compared to other (Emirates) and GCC countries Governmental encouragement One of the strategies of UAE has been to promote industrialization away from oil and gas based industries in order to ensure a stable broad based economy for a balanced growth in the medium to long term. Automotive industry is an ideal investment scenario. Besides saving expensive imports, it tends to drive all-round development by investing in R&D, developing ancillary industries and generating employment opportunity for the locals. UAE has taken a number of steps in broadening the industrial base away from oil and gas.
There is no local production of passenger cars, and only a small number of commercial vehicles are assembled locally The domestic market is largely dependent on international car manufacturers for the style and design of autos, and its profitability is dictated by their demands
Opportunities
As a result of climatic conditions and a rugged terrain, there is a vibrant and growing market for accessories and spare parts Trade liberalization between the GCC states of Saudi Arabia, UAE, Kuwait, Oman, Qatar, and Bahrain and the EU will open regional markets to more European imports Plans for a car assembly plant could help spawn a local automotive manufacturing industry Car leasing is becoming more attractive with residents preferring to hire a car rather than take out loans
Threats
The rising cost of living is putting pressure on sales and could lead to a decline in the market share of luxury brands, which have led growth in recent years
22
The UAE is a member of the Gulf Co-operation Council, which being a common market can access the GCC market with common favourable terms. The UAE has one of the most liberal trade regimes in the Gulf, and attracts strong capital flows from across the region In common with most Gulf states, there are a high number of expatriate workers at all levels of the economy, making up for the otherwise small workforce The UAE is progressively diversifying its economy, minimizing vulnerability to oil price movements
The UAE is a member of the Gulf Co-operation Council, a six member common market, and has been a member of the WTO since 1996 The state has invested large amounts in infrastructure, and will continue to do so over the next 10 years The UAE's diversified economy reduces risks from volatile oil prices
Weaknesses
Weaknesses
The UAE's currency is pegged to the dollar, giving it minimal control over monetary policy and reducing its ability to tackle inflationary pressure
Opportunities
Due to the state's federal nature, regulations can vary considerably across the emirates The regional economy is oil-dependent. This has historically been very cyclical, which increases risks for long-term projects
Opportunities
Oil prices are expected to stay high (by historical standards) Economic diversification into gas, tourism, financial services and high-tech industry offers some protection against volatile oil prices The construction, tourism and financial sectors are growing rapidly, driven by domestic and foreign investment
Threats
Large number of free trade zones offering tax holidays and full foreign ownership Comparatively relaxed rules on expatriate employment The UAE's social stability and relative prosperity means that there is far less concern for security than in some other Gulf states
Threats
Some bottlenecks have been forming in the construction sector and there is a chance of delays in several high-profile construction projects
Oil prices have massively increased liquidity in the region. This has resulted in strong financial inflows,
23
Trade Pie
Reexports 23% Imports 77% Auto compone nts 24%
24
Table : Automotive import market of UAE (In million USD) Category Vans and Buses Cars Trucks UAE- Total GCC Total As % of GCC total 2003 121 1,987.00 265 2,373.00 10,748.00 22% 2004 113 2,451.00 177 2,741.00 11,646.00 24% 2005 134 3,183.00 142 3,459.00 14,386.00 24% 2006 244 3,923.00 371 4,538.00 17,730.00 26% 2007 387.35 6,017.88 956.52 7,361.75 24,141.00 30% 2008 766.19 7,307.52 1113.13 9,186.84 N/A
Fig -8 Import of vehicles during 2004- 2008 The passenger car segment in UAE accounted for about 82 % of the total UAE market in 2007 while trucks and buses together accounted for the remaining 18%.
Imports 80%
Car 80%
Import of Components (in million AED) Source- Dubai port & customs, Dubai World HS Code HS Code Description 2008 2007
87081000 87082100 87082910 87083000 87083100 87083900 87084000 87085000 87087000 87088000 87089100 87089200 87089300 87089400 87089500 87089900 Bumpers & parts Safety seat belts Luggage carriers Brakes and servo-brakes Mounted brake linings Brakes & servo-brakes & parts-II Gear boxes Drive-axles with differential, Road wheels & parts & accessories Suspension shock-absorbers Radiators Silencers & exhaust pipes Clutches & parts Steering wheels, columns & boxes Safety airbags Parts & accessories of vehicle body
Total in million AED Total in million USD
2006
78.55 2.58 6.38 0.00 42.87 161.27 40.26 32.06 196.58 242.86 40.23 12.26 228.04 97.83 0.00 5,391.18
6,591.61 1796.10
251.12 8.20 11.84 195.96 3.16 51.55 71.61 31.37 283.27 200.00 65.20 27.32 441.09 182.83 6.55 8,558.91
10,389.97 2831.05
142.68 5.61 21.05 1.25 41.62 404.35 56.34 48.05 220.27 304.48 51.66 12.18 502.78 181.53 0.05 6,855.48
8,867.91 2416.35
Re-exports of Components (in million AED) Source- Dubai port & customs, Dubai World HS Code HS Code Description 2008 2007
87081000 87082100 87082910 87083000 87083100 87083900 87084000 87085000 87087000 87088000 87089100 87089200 87089300 87089400 87089500 87089900 Bumpers & parts Safety seat belts Luggage carriers Brakes and servo-brakes Mounted brake linings Brakes & servo-brakes & parts-II Gear boxes Drive-axles with differential, Road wheels & parts & accessories Suspension shock-absorbers Radiators Silencers & exhaust pipes Clutches & parts Steering wheels, columns & boxes Safety airbags Parts & accessories of vehicle body
Total in million AED Total in million USD
2006
26.28 17.85 1.00 0.00 4.75 31.45 15.89 6.75 91.03 70.12 46.66 1.52 78.92 6.10 0.00 2,088.00 2,487.77 677.87
58.96 30.30 1.08 13.13 0.20 9.69 13.35 5.14 91.14 97.48 17.22 4.03 108.73 88.99 0.62 3,665.59 4,206.72 1146.24
48.96 31.68 7.99 0.09 5.08 74.83 25.48 12.54 100.38 84.89 68.65 4.32 128.75 26.28 0.01 3,072.04 3,693.54 1006.41
26
Imports Re-exports
Regions
Africa Middle East Cis-Russia Asia Europe Others Total
Re-exports-2008
517,483,149 2,109,020,953 396,182,709 357,914,786 283,301,009 542,821,892 4,206,724,498
Cis-Russia 9%
This can be attributed to the fact that UAEs political stability and strategic location within the Middle East has helped it establish and emerge as regional headquarter for many international market players. In view of above, the buoyancy of the automotive trade market is a result of the increasing domestic and neighboring countries consumption of vehicles and related goods and services. However, to further boost this market, avenues surrounding the encouragement of local manufacturing and assembling of motor vehicles needs to be stimulated in order to gain an edge over the competitors and market players from other neighbouring countries. 27
Country Name
Nigeria, Kenya, Tanzania, Algeria, Sudan, Angola, Congo Republic, Ghana, Uganda, Mozambique, Ethiopia Singapore, Pakistan, Afghanistan, Hong Kong Iran, Iraq, KSA, Libya, Egypt, Kuwait, Syria, Yemen, Bahrain, Oman, Lebanon, Qatar Kazakhstan, Ukraine, Azerbaijan, Russia Turkey, Germany, Finland, Italy, UK (United Kingdom)
Parts & accessories for bodies (in 2008) Major Sources AED
GERMANY JAPAN SOUTH KOREA USA CHINA OTHERS Total in AED 2,250,738,758 2,151,491,599 982,790,828 857,427,987 539,775,411 1,776,684,113 8,558,908,696
AED
129,518,989 40,438,403 16,715,145 12,673,187 51,775,410 251,121,134
AED
182,019,154 125,161,324 41,254,048 23,719,789 68,940,566 441,094,881
Major Sources
JAPAN BRAZIL
AED
103,767,143 54,649,599 24,411,426 182,828,168
AED
42,895,708 42,341,874 26,571,417 20,859,796 16,322,222 46,970,918 195,961,935
OTHERS Total
Road wheels & parts & accessories (in 2008) Major Sources AED
CHINA GERMANY USA OTHERS Total 187303058 24385475 14423613 57157734 283,269,880
28
UAE Trade on new All Types of Automobile Tyres & Tubes in 2008 Imports
NEW PNEUMATIC TYRES
cars buses & lorries. argriculture or forestry vehicles Industrial handling vehicles < 61 cm of a kind used on construction or industrial handling vehicles>61 cm of a kind used on agricultural or forestry vehicles & machines. having a herring-bone" or similar tread, n.e.s. of a kind used on agricultural or forestry vehicles & machines New pneumatic tyres of rubber, n.e.s.
Re-exports
Value (AED)
1324694809 284566493 71,065 2,678,296 1,179,262 247606 1,147,181 8,757,438 58258875
Value (AED)
1853365027 1190378134 22,579,890 47,346,029 9,167,141 969519 3,170,660 54,418,049 95787325
Units
9636233 2198087 100,365 50,155 4,520 5193 11,167 21,847 448235
Units
4898306 565151 405 13,644 225 603 3,444 146,936 159414
3,277,181,774
12,475,802
1,681,601,025
5,788,128
633119 3726889
2701 20852
2711137 645368
19571 250
4,360,008 199842
23,553 3702
3,356,505 12043841
19,821 268279
11,952,010
88229683
135,866
531643
2,098,940
40286988
1,902
206381
INNER TUBES
For motor cars buses or lorries.
TOTAL IN AED
3,381,923,317 921.50
13,170,566
1,739,387,299 473.95
6,284,511
TOTAL in million USD Source- Dubai port & customs, Dubai World
29
The imports of all types of tyres and tyre products of UAE in 2008 were valued at Dhs 3.4bl ($0.92bl/ 13 million in numbers),(compared to Dh2.73bl($0.74bl/ 11.9 million in numbers) in 2007 with an increase of 24% out of which about 97% constitute new pneumatic tyres for car, bus and lorries. The growth trend is expected to rise further in 2009. Out of total import of new pneumatic tyres, car tyres constitute 56% followed by bus & lorry tyres of 36% and rest being tyres for other end uses. Car tyres worth Dhs 1.85bl and Commercial tyres worth Dhs 1.19bl for buses and lorries were imported respectively to UAE in 2008, mainly from Japan, China, and India. Out of which UAE consumed almost 66%, re-exporting 34% mainly to Iran, Iraq, and African countries.
Re-exports
Value (AED) 1,681,601,025 3,356,505 12,043,841 2,098,940 40,286,988 1,739,387,299 473.95 Units 5,788,128 19,821 268,279 1,902 206,381 6,284,511
The commercial vehicle market is an essential industry in the UAE, increase of 35% is expected from 2008 to 2012 according to industry sources. UAE (particularly Dubai) is a transportoriented country with one car for 1.84 residents, and an average vehicle occupancy rate of 1.7, it has the highest rate of car ownership than any other city in the world. The absence of automotive manufacturing industries results in most of the vehicles and automotive tyres and parts being imported for domestic use and re-export to other countries.
The positive trend for tyre industry is not just limited to the UAE, but the entire Middle East (with about 4 to 5ml passenger cars and booming fleet of transport vehicles) is characterized by a diverse structure of economies, climates and transport conditions. The lack of railway connections on the Arabian Peninsula, forces most of the overlandtransport on the road, making it a high-volume sales territory for tyre manufacturers. Emerging markets in Africa are sourcing their products from the region, mainly from UAE. In general, there exists a huge opportunity to enter UAE market least affected by the current credit crunch.
30
SCANIA
Swedish automaker Scanias JAFZA plant opened recently. With this new factory, the automaker will become the first vehicle assembler in the UAE. It will provide completed vehicles to all states in the GCC.
The plant is modest with a capacity for 1,400 vehicles a year, initially for construction haulage, such as tipper and concrete trucks, but is to be adapted for bus chassis assembly in the future. It will assemble vehicles from semi knocked down kits (SKDs), adding locally-sourced components. Ashok Leyland of India is one of the biggest names in industry set up their assembly unit in Ras Al Khaimah, the northern most emirate. The company's integrated assembly plant is to build 1000 buses per year in RAK and has started its operations in the year 2008.This is the first fully integrated Bus/truck manufacturing in the whole of GCC.
Ashok Leyland
In 2008, Hafilat Industries of the UAE won an AED30mn (US$8.17mn) contract to supply locally assembled buses for export. A new purpose-built plant in the Industrial City of Abu Dhabi has been inaugurated for the assembly of the buses under licence from Australias Volgren.
VOLGREN
The buses will be built on the chassis of Euro IV-compliant Mercedes-Benz models, imported from Spain, but will take the form of Volgrens New Generation City Bus, which is made from aluminium in order to be lighter and stronger.
Production of the buses began in May09, and the order should take four months to fill. Hafilat will assemble double-decker, compressed natural gas (CNG), hybrid, and trolley buses for public transport. The company occupies a niche in providing in European-standard buses, through its use of Mercedes-Benz chassis and the Swiss technology used in its assembly processes.
Praktiko
In 2007, Dubai-based engine producer Praktiko GT announced plans to begin car production in the UAE. From a new production plant in Dubai Investment Park, the company plans to produce the Tiger Kub budget model for export to Africa and India, where small cars under INR100,000 (US$2,500) represent the growth segment.
Investor interest has also focused on bus assembly. Founded in 2003, Trans Continental Industries is the UAEs first facility for manufacturing buses and other additional components and began operations in 2006 with initial capital of AED15.5mn (US$4.2mn). The companys assembly operations are based in the Mussaffah Industrial Complex in Abu Dhabi. It is jointly owned by Advanced Industries of Arabia (51%), through its UAE partner Bin Jabr Group, and the UKs Vectra Azad (49%). The facility, the first of its kind in the UAE, is planning to expand its manufacturing base, targeting production of mini buses, school buses, public transport buses, luxury coaches and built-to-order buses. At present, it manufactures bus bodies and components, including the base structure for chassis, doors and seats. 31
Also in March09, Abu Dhabi state-owned group International Petroleum Investment Company (IPIC) completed its purchase of a majority stake in MAN Ferrostaal, a unit of German industrial group MAN. The EUR490mn deal will provide greater market access to countries where Ferrostaal is active. According to figures published by the Dubai Chamber of Commerce and Industry (DCCI), companies operating in Dubais automotive sector, including retail, maintenance, repair, parts, and accessories, have an average annual turnover of AED4.5mn (US$1.23mn) and employ an average of seven people. According to DCCI data, these sub-sectors are dominated by small-sized companies, those with fewer than 10 employees, and 84% of motor traders fall into this category. However, 61% of total turnover in the motor trade sector is generated by medium-sized companies with workforces of 1099 employees. In 2007, the DCCIs database showed that around 365 companies were actively involved in the trading of motor vehicles and related items, 2,018 companies were involved in trading of motor vehicle parts and accessories, 204 companies were involved in the maintenance and repair of motor vehicles, and 73 companies were involved in other activities (trading, maintenance, and repair of motorcycles and related parts and accessories). These companies collectively employ about 14,400 people. Together they have invested paid-up capital of AED3.1bn and have an annual turnover of AED8.6bn. The number of traders in spare parts and maintenance represents about 83.5% of the automotive market, with vehicle trade accounting for 13.7%. Vehicle trading companies employ over 4,100 people, have a paid-up capital of AED1.3bn, and an annual turnover of AED5.5bn.
32
33
UAE is one of the most important regional and global markets for Rolls-Royce. In 2008, the Gulf region contributed 18% to car sales, with 216 units sold out of over 1,200 units sold globally. Abu Dhabi and Dubai accounted for sales of 100 units. UAE is the regional leader and number two globally in terms of market for Rolls Royce. According to TradeArabia News Service, German autos manufacturer Porsches largest dealership, Porsche Centre Dubai (PCD), of the Al Nabooda Automobiles group, registered its best ever December sales. In December 2008, sales were up by 50% y-o-y compared with sales in December 2007, resulting in a 28% y-o-y increase. Going forward, the UAE is likely to remain the largest luxury car market in the MEA. While luxury car sales are broadly correlated with per capita income, BMIs forecasts suggest some variance between markets largely due to income distribution. In the Gulf states, the UAE will retain its dominant position as the largest luxury car market in the region, growing by around 70% over the forecast period (up to end2013). Brand competition is set to heat up throughout the region, particularly in the entry-level segment, where non-luxury brands are introducing new top-of-the-line models falling into this category. Exchange rates will also play an important role in determining demand in this segment. These factors will lead to erosion in the market share of European manufacturers such as Mercedes and BMW, with US carmakers as, to a lesser extent, Japanese brands likely to reap the rewards of rising demand.
34
35
36
Government Incentives
One of the strategies of UAE has been to promote industrialization away from oil and gas based industries in order to ensure a stable broad based economy for a balanced growth in the medium to long term. UAE offers a number of incentives/ benefits to companies/investors to this effect. Fiscal Benefits; include 100% income and corporate tax exemptions, 100% capital and profit repatriation, Fully convertible currency, Exemption of equipment and raw material required by industrial units from customs duty. Regulatory benefits include; 100% ownership in Free Zones, No trade barriers or quotas, Easy licensing procedures & company formation, Liberal labour laws and no restrictions on hiring expatriate . Highlights.. Government Incentives Sound Macro-economy Excellent infrastructure and logistic support system Strategic location Increasing demand for vehicles and components Base for Raw materials-Aluminium, Plastic and glass for automotive sector
Sound Macro-economy; High per capita GDP, High standard of living, Relatively low inflation. High
business confidence and an increase in disposable income provide a favorable background for the automotive sector
Excellent infrastructure and logistic support system; UAE has invested large amounts in
infrastructure, and will continue to do so over the next to come.
Increasing demand for vehicles and components; In 2008, total trade in this sector accounted for $16.9 billion
in UAE alone of which 77% were imports, 23% were re-exports. Locally manufactured vehicles, spare parts and accessories are sparse. As regards the 2008 distribution of total trade within this sector by activity, motor vehicles accounted for 68%, followed by auto component 24% and tyre was 8% respectively
Strategically located; Easy access to huge markets like Middle East & North Africa( MENA), India, South-East Asia
and CIS countries
Base for Raw materials- Aluminium, Plastic and float glass; UAE has potential to become a base for
aluminum, plastics, glass based industry due to availability of raw materials locally. This in turn can be developed into a base for aluminum, plastic etc based auto component industry.
Aluminium
DUBAL (in Dubai, UAE) has evolved into a global aluminium producer and presently has a production capacity of more than 980,000 metric tonnes of quality hot metal per year. More than 92 per cent of DUBAL's total production is exported to global markets. Presently exporting to 48 countries, with key markets including the Far East, Europe, the ASEAN region, the Middle East, the Mediterranean region and North America. DUBAL produces extrusion billets for wheel forging, as well as for automotive applications. DUBAL also produces high purity aluminium used in the manufacture of electronic components. 38
Plastics
With the drive to reduce fuel efficiency and to meet new emission regulations gaining importance, the attempt to use more and more plastics in car is gaining momentum. It is estimated that about 13-15% of the weight of an average-sized family car is now made out of plastic. This compares to about 6% twenty years ago. As an example, the use of Thermoplastic Elastomer (TPE) in auto industry has increased from 185,000 tons in 1991 to 280,000 tons in 1995, an increase of by 51%. Currently the auto components are made from plastics are Dash Boards, Manifolds, Air bags, Bumpers, Clutch activating system, Interior trims, Window glazing and wind shields. Types of plastics used include Thermoplastic Elastomer, Polyamide, Polyphthalamide, Polycarbonate, Polypropylene, etc. Abu Dhabi Polymers Company Limited (BOROUGE) under ADNOC (Abu Dhabi, UAE) and SABIC (Saudi Arab) producing basic plastic raw material and a range of differentiated products for high-value applications including automotive components. With GCC striving to become a leader in the field of plastics, this is an opportunity to develop UAE as a plastic based automotive component supply base.
Float Glass
There are two major float glass manufacturers in UAE with total approx. capacity of 0.45 million tonnes/ yr, started operation during 2007-2008 producing glass for use in automotive and also for construction applications US firm Guardian, UAEs dominant float glass supplier, built the UAEs first float glass manufacturing facility (Guardian Zoujaj International Float Glass Co Llc) with joint venture with The National Company for Glass Investments (Zoujaj) of Saudi Arabia and Zamil Group also of Saudi Arabia, in the RAKIA Industrial park, Ras AlKhaimah in 2007. Guardian RAK produces 700 tons of glass per day for use in automotive and construction applications, including high-performance coated glass. Emirates Float Glass, a subsidiary of Dubai Investments PJSC, a 600-tons/day float glass facility has launched commercial operations at its manufacturing facility in Abu Dhabi. The $200 million plant, located at the Industrial City of Abu Dhabi, has commenced manufacture and supply of premium float glass products to the architectural and automotive markets for local market and exports.. The plant is built with technological assistance from US-based PPG Industries, global leaders in glass manufacturing technology.
39
Identified Projects
The present study has investigated automotive sector in GCC with major emphasis in UAE, with a view to identify potential investment opportunities. In view of the strong imports seen over the years for vehicles and its components in the GCC, UAE in particular, there is a strong case for the development of automotive industry in UAE. However, Because of its competitive edge in terms favourable investment environment and strategic location, UAE has the potential to become a manufacturing hub for whole range of components, both for OEMs and Replacement/After Market manufacturers and accessories like Light Fittings, HAVC system, Seats. Tyres, Batteries, Fasteners etc. not only to serve the local market but also exports to various markets. However, the emphasis would be to attract Vehicles manufacturers (OEMs), the anchor industry and the catalyst for the development of the whole automotive sector. The identified projects based on strong imports and re-exports and volume of trade seen over the years for vehicles and its components in the GCC/ UAE, have been listed below. However, it requires carrying out detailed feasibility studies before embarking upon projects of this nature.
40
2007
27,017,622,902 6,192,020,288
In no of units
Imports Re-exports
2008
475,567 161,041
2007
542,141 136,784
40.000 35.000 In billion AED 30.000 25.000 20.000 15.000 10.000 5.000 0 2008 2007 Imports Re-exports In millions
Imports Re-exports
Type of Vehicle Imports in Y 2008 in UAE Category Car Motor Vehicle for Transport of People Motor Vehicle for Transport of Goods Grand Total Value (AED) 26,818,609,248 2,811,911,927 4085,191,976 33,715,713,151 Units 408,903 16,202 50,462 475,567
Transpo rt vehicles 12% Bus etc 8%
Imports-2008
Car 80%
Type of Vehicle Re-exported in Y 2008 from UAE Category Car Motor Vehicle for Transport of People Motor Vehicle for Transport of Goods Grand Total Value (AED) 6,660,332,310 242,806,432 1,490,063,296 8,393,202,038 Units 136,168 3,645 21,228 161,041
Transpo rt vehicles 18% Bus etc 3%
Re-exports-2008
Car 79%
41
Casting, Machining Blanking, Machining Stamping, Casting Casting, Forging, Extruding Stamping
42
BODY STRUCTURE Body Panels Bumper Assemblies CHASSIS/SUSPENSION Steering Gear/Column Rear Axle Assembly Front Suspension Wheels Brakes SEATS/TRIM Seats Instrument Panel Headliner/Carpeting Exterior Trim HVAC SYSTEM A/C Compressor Radiator/Heater Core Engine Fan
Steel, Plastic, Aluminum Steel, Plastic, Aluminum Steel, Magnesium, Aluminum Steel, Plastic Steel, Aluminum Steel, Aluminum Steel, Friction Materials Steel, Fabric, Foam Steel, Fabric, Foam Synthetic Fiber Plastic, Aluminum Zinc Die Casting
Stamping, Molding Stamping, Molding Casting, Stamping, Forging Machining Stamping, Molding Stamping, Forging Stamping, Forging Stamping, Forging Molding, Stamping Molding, Stamping Molding Molding, Casting, Stamping
However, from the trend of UAEs trade volume of auto components (import and re -export), and possible opportunities for expansion of the existing units or addition of new capacities the following auto components have been identified. Parts like bumpers, brakes, road wheels & parts & accessories, suspension shock-absorbers, clutches & parts, steering wheels, columns & boxes and parts & accessories of vehicle body are the major items traded during 2008. In value terms constitutes 97% of the total amount of imports in 2008.
43
2008
8,558.91 3,665.59
2007
6,855.48 3,072.04
2006
5,391.18 2,088.00
In no of units
Imports Re-exports
2008
30,309,298 28,208,085
2007
5,606,998 3,151,127
2006
3,684,515 2326588
9,00 8,00 7,00 6,00 5,00 4,00 3,00 2,00 1,00 0,00 2008 2007 2006
35 30
In million nos
in billion AED
25
20
Imports Re-exports
15 10 5
0 2008 2007 2006
Imports Re-exports
About 80% of import of these items were from Germany, Japan, South Korea, USA and China. Source of imports
Major Sources
GERMANY JAPAN SOUTH KOREA USA CHINA OTHERS Total in AED
In ml AED
2,250,738,758 2,151,491,599 982,790,828 857,427,987 539,775,411 1,776,684,113 8,558,908,696 CHINA 6%
GERMANY 26%
JAPAN 25%
44
2008
251.12 58.96
2007
142.68 48.96
2006
78.55 26.28
In no of units
Imports Re-exports
2008
790,993 175,947
2007
205,650 21,700
2006
210,030 29,332
300 250
150 100
50 0 2008 2007 2006
millions
0,90 0,80 0,70 0,60 0,50 0,40 0,30 0,20 0,10 0,00 2008 2007 2006
In million AED
Imports Re-exports
About 80% of import of these items were from Japan, Germany, USA and China. Source of imports
Major Sources
JAPAN GERMANY USA CHINA OTHERS Total
AED
129,518,989 40,438,403 16,715,145 12,673,187 51,775,410 251,121,134 CHINA 5% USA 7%
OTHERS 21%
JAPAN 51%
GERMANY 16%
45
Suspension shock-absorbers
There has been an 34% decrease in imports in 2008 over 2007 in value term but in terms of units there was considerable increase in numbers. This is mainly due to reduction in price in 2008 and increase of Chinese market share in this segment with lower price. The re-exports had gone up by 15% in terms of value term. About 77% of import of these items were mainly from Japan, Germany and China.
2006
242.86 70.12
In no of units
Imports Re-exports
2008
1,169,773 194,847
2007
410,777 266,495
2006
508,149 113,710
The main reason behind Chinas increased market share is not only due to aggressive marketing but also the pricing which is considerably lower than others. China has been promoting heavily through some of the established agents and has been able to make a breakthrough by introducing some products in the lower price segment.
350 300
1.40 1.20
In million AED
In million nos
250
200
1.00
0.80
150 100 50
0 2008 2007 2006
Imports Re-exports
Imports Re-exports
Source of imports-2008
Major Sources
JAPAN GERMANY CHINA OTHERS Total
AED
82,715,745 40,575,703 30,243,377 46,461,975 199,996,800
Suspension shock-absorbers
OTHERS 23% CHINA 15%
JAPAN 42%
GERMANY 20%
46
2006
228.04 78.92
In no of units
Imports Re-exports
2008
1,835,596 562,674
2007
394,930 29,504
2006
338,029 94,577
2,00
Re-exports
In million nos
500
Imports
2006
2008
2007
2006
Source of imports
Major Sources
JAPAN GERMANY SOUTH KOREA CHINA OTHERS Total
AED
182,019,154 125,161,324 41,254,048 23,719,789 68,940,566 441,094,881 SOUTH KOREA 9% CHINA 6%
GERMANY 28%
47
2006
161.27 31.45
In no of units
Imports Re-exports
2008
1,764,751 77,481
2007
548,361 140,259
2006
445,730 75,091
450 400 350 300 250 200 150 100 50 0 2008 2007
2 Imports Re-exports In millions 1,5 1 0,5 0 2006 2008 2007 2006 Imports Re-exports
Source of imports
Major Sources
CHINA GERMANY JAPAN SOUTH KOREA USA OTHERS Total
In million AED
AED
46,884,445 62,251,233 42,104,277 25,516,527 17,192,137 53,564,048 247,512,667
USA 7%
OTHERS 22%
JAPAN 17%
48
2006
196.58 91.03
In no of units
Imports Re-exports
2008
2,889,040 536,184
2007
1,385,680 191,462
2006
1,051,517 262,776
300 250 In million AED jn millions 200 150 100 50 0 2008 2007 2006 Imports Re-exports
3,50 3,00 2,50 2,00 1,50 1,00 0,50 0,00 2008 2007 2006
Imports Re-exports
Source of imports
Major Sources
CHINA GERMANY USA OTHERS Total
AED
187303058 24385475 14423613 57157734 283,269,880
USA 5% GERMANY 9%
49
2008
159.07 84.48
2007
117.15 58.12
2006
109.60 47.01
In no of units
Imports Re-exports
2008
2,705,667 73,211
2007
200,104 57,290
2006
505,209 68,216
180,00 160,00 140,00 120,00 100,00 80,00 60,00 40,00 20,00 0,00 2008 2007 2006
3,00 2,50 In millions Imports Re-exports 2,00 1,50 1,00 0,50 0,00 2008 2007 2006 Imports Re-exports
In million AED
50
Re-exports
Value (AED) 1,681,601,025 40,286,988 Units 5,788,128 206,381
3,365,411,457
917.00
13,007,445 1,721,888,013
469.18
5,994,509
2008
3,365.41 1,721.89
2007
2,764.08 1,781.27
In mllion units
Imports Re-exports
2008
13.01 5.99
2007
12.11 6.21
Imports 4.000 3.500 3.000 2.500 2.000 1.500 1.000 500 0 2008 Imports Re-exports In million 14,00 12,00 10,00 8,00 6,00 4,00 2,00 0,00 2008 Re-exports
In million AED
2007
2007
51
Tyre manufacturing is heavily dependent on raw materials like natural rubber (NR), synthetic rubbers (SR) and carbon black which accounts for 70% of the raw material cost. The major sources of NR are being South-East Asia and Far East (Thailand, Indonesia, Malaysia, India, Vietnam, China and Sri lanka) which accounts for about 95% of global production in 2008. The major sources of Synthetic Rubber are being South-East Asia and Far East which accounts for about 46% of global production in 2008 followed by Europe and USA. All these have to be imported. Both natural and synthetic rubbers are being imported in UAE for manufacturing of various other rubber products. UAE trade figure in 2008 has been given below. The major sources of imports of NR being India, Thailand, Malaysia and Sri Lanka. The major sources of imports of SR being France, Belgium, UK, South Korea. Netherlands & Germany. UAE trade on NR & SR in 2008 Source- Dubai port & Customs-Dubai World
IMPORTS RE-EXPORTS
Weight (KG)
Value (AED)
Weight (KG)
Value (AED)
1,789,744 27,324,125
17,810,676 233,950,113
278,487 1,762,351
2,358,589 17,618,129
Similarly, Carbon Black is being imported in UAE for use in manufacturing rubber products, plastic, inks, paints &
coatings and other end-uses. UAE trade figure in 2008 has been given below. The major sources of imports are being Netherlands, Germany, India, Iran & USA. UAE trade on Carbon Black in 2008Source- Dubai port & Customs-Dubai World
IMPORTS Description Weight (KG) Value (AED) Description Weight (KG) RE-EXPORTS
Carbon Black
15,564,719
86,326,022
1,192,764
4,930,562
52
The imports of all types of accumulators in 2008 were valued at Dhs 726 ml ($198ml/ 2 million in numbers), compared to Dh 554ml($151ml/ 1.7 million in numbers) in 2007 with an increase of 31%. The growth trend is expected to rise further in 2009. Imports in 2008 were mainly from South Korea, Indonesia, China, Malaysia, Thailand & India. Re-exports were mainly to- Middle East & African countries like Iran, Iraq, Saudi Arabia, Lybia, Yemen, Tanzania, Nigeria, Sudan, Algeria and Cameroon. Re-exports were about 25% in value term.
UAE Trade on Vehicle Batteries in Y 2006-2008 (Ref Annexure-10 for detailed Break-up) In ml AED
Imports Re-exports
In no of units
Imports
2008
1,983,954.00 1,000,530.00
2007
1,704,628.00 669,439.00
2006
1,740,073.00 536,862.00
Re-exports
800,00 700,00 600,00 500,00 400,00 300,00 200,00 100,00 0,00 2008 2007
2,50 Imports Imports Re-exports Achsentitel 2,00 1,50 1,00 0,50 0,00 2006 2008 2007 2006 Re-exports
In million AED
53
e/f = estimate/forecast. Sources: Dubai Chamber of Commerce and Industry, UAE Ministry of Planning, UAE Ministry of Interior, BMI
The UAE has become one of the favourite markets for automobile companies around the world, primarily due to the fact that the Middle East region has been one of the more resilient markets for automobile manufacturers when compared to the North American and European markets. Before the global economy hit the skids, vehicle numbers were easily outpacing the rate of population growth. The number of vehicles on the road rose by 49% to 583,015 units in 2008 from 392,546 units in 2006, according to Gulf News (citing the Abu Dhabi Traffic Department). The growth in the number of vehicles was attributed to the increase in residents and new companies entering the emirate. In Dubai, the number of registered vehicles rose to 1.045mn in 2008, up from 853,827 in 2007, Gulf News said. But the economic downturn has taken a temporary toll on this robust growth. Dealers have reported high levels of unsold stock and dwindling profit margins this year. According to the Licensing Agency of the Dubai Roads and Transport Authority, there has been a rapid slowdown in the number of new registered vehicles in the emirate. As reported by Gulf News, new vehicle registrations in Dubai rose just 4.5% in the first six months of the year, compared to a 17% increase in the year-ago period. In the first two months of the year, the number of vehicle registrations dropped 3% y-o-y, according to the Vehicles and Drivers Licensing Department of the Abu Dhabi police. The daily registration rate fell to 500 vehicles, down from 700-1,000 in 2008. With 70-80% of UAE sales financed through credit, restrictions on lending have severely hit the market. The government has put in place policies to stabilize the economy and get credit flowing. According to Bloomberg, it has made approximately US$32.6bn available to banks in an effort to get them to make financing available to business and consumers. While financing still remains, for the most part, difficult to come by, there are signs that these efforts are starting to stabilise the market. In March 09, leading distributor Al-Futtaim announced it was teaming up with banks to provide autos loans to buyers who wouldnt normally be able to qualify for a loan because they dont earn enough, the Middle East North Africa - Financial Network has reported. Around the same time, HSBC Holdings slashed the minimum monthly salary required for consumer and autos loans in the UAE by 50% to AED10,000, according to published reports. Along with an improved credit conditions, there are signs that UAE economy overall is on the road to recovery. In August, the head of the UAEs central bank told Al Ittihad newspaper that he expects crude prices to rebound in 2010. As reported by Emirates Business, he predicted that this would help the economy return to growth. The sharp fall in crude prices in the last year has been the main source of the decline in Gulf economic growth, and consequently, auto sales. BMI believes that as the UAE economy gains strength, this will help lay the foundation for a recovery in auto sales. The credit freeze may be starting to thaw, but credit is trickling down very slowly to the consumer level and it will some time before the heady days of credit-fuelled buying return - if ever. Still, auto sales are showing some signs of life. Evidence suggests consumers are paying cash for vehicles in response to aggressive pricing and promotional offers. Dealers are deeply discounting prices and offering free add-ons in a bid to move stock, making it a buyers market. The 54
luxury segment has been largely unaffected by credit issues, although sales have not been immune from the downturn. In Q109, BMW Middle East posted a 9% fall in sales. But regional sales and marketing director James Crichton said the drop was in line with its estimates and that the company remains optimistic about the regions growth. BMI envisages that the premium segment will continue to thrive, even during the downturn, as residents with high net worth will remain relatively unaffected by the credit crunch. Although, anecdotal evidence suggests that dealers in the UAE are turning to leasing schemes as customers find it increasingly difficult to secure loans. The UAEs car dealers say that lower-cost cars are the worst performing, although BMI believes that over the medium term smaller, more economical models will become more popular. At the present time, consumers who are most likely to purchase vehicles from this segment are holding back purchases, waiting for further discounts, more favourable credit terms and mindful of the uncertainties in the wider economy. The market for commercial vehicles is also showing some signs of life. The Department of Transport in Abu Dhabi placed an order with German autos manufacturer MANs affiliate MAN Nutzfahrzeuge for 400 city and intercity buses. The supply of 250 MAN Lions City low-floor buses and 150 MAN Lions Regio intercity buses started in April09.
55
56
The Government of Ras Al Khaimahs constant endeavor to enhance infrastructure facilities across the emirate has been a major factor in attracting major foreign investments to Ras Al Khaimah. With a well-planned road network, an international airport, fully equipped seaports, and advanced communications network, Ras Al Khaimah is wellpositioned for rapid socio-economic growth.
57
Although the drive to attract foreign companies has been a recent development, RAK has long been one of the industrial centres of the UAE. The industrial sector has been dominated by the three main industries of Cement, Ceramics and Pharmaceuticals. The sector has diversified in the recent years especially since the creation of free zones as well as partnerships between government and foreign investors. Ras Al Khaimah has a natural advantage when it comes to the production of cement as the Al Hajar mountain range holds vast supplies of high quality limestone, which is a key raw material for cement manufacturing. The emirate is also rich in other raw materials such as clay, quartz and other minerals. The pharmaceutical industry in RAK is about 30 years old and has been one of the key focus areas of government plans since several years. The industry in RAK is dominated by the Gulf Pharmaceutical Industries, known as Julphar. The company has grown into a pharmaceuticals giant by Middle East standards and now exports to over 80 countries. Julphar is the biggest pharmaceuticals manufacturer in the UAE. What RAK lacks in oil is somewhat compensated for by its natural mineral water resources. RAK is the origin of Masafi mineral water brand, the region's leading mineral water brand, with its source lying in several rich underground springs in the mountainous city of Masafi. Masafi water, has developed into an international brand which exports bottled water and fruit juices to more than 20 countries. RAK INDUSTRIAL ACTIVITIES- Highlights
One of the largest producers of cement in the Gulf region. Al Hajar range of mountains contain high quality limestone deposits. One of the largest producers of medicines in the UAE (Julphar) One of the largest producers of ceramic tiles and sanitary ware in the world (RAK Ceramics) Regions leading brand of mineral water (Masafi) Increased industrial activities with the creation of free zones and partnerships between government and foreign investors Thousands of small and medium scale industries in diversified sectors of manufacturing Emphasis on high-tech industries
RAK Ceramics is the single largest, state-of-the-art, ceramic tile manufacturer in the world with its 12 plants spread across the UAE, India, Bangladesh, Sudan, Iran and China, producing over one hundred million square meter of tiles and 3 million pieces of sanitary-ware annually, exporting to 135 countries. The UAE operation is the largest single location ceramic manufacturing facility in the world with more than 6,000 active models in the ceramic and porcelain tiles segment, and an exclusive range of more than 600 active models of sanitary ware to offer with a wide choice in designer bathroom sets, wash basins, bathtubs and related items. RAK Ceramics has diversified horizontally by forming several joint ventures including Kludi RAK LLC, RAK Porcelain LLC, Laticrete RAK LLC and many more in Ras Al Khaimah.
58
The RAK Investment Authority (RAKIA) was constituted as per Emiri Decree No. (2)/ 2005 issued by H.H. Sheikh Saqr Bin Mohammed Al Qasimi, Supreme Council Member and Ruler of Ras Al Khaimah. The mandate for the authority is to work towards reinforcing the investment climate in the emirate and to promote its various economic sectors. Under the direction of H.H. Sheikh Saud bin Saqr Al Qasimi, the Crown Prince & Deputy Ruler of Ras Al Khaimah, we are pursuing the goal of making Ras Al Khaimah a regional hub for industrial manufacturing, trade and commerce. The GDP of RAK has grown significantly over the past few years. The growth is driven by increased focus on manufacturing, services, real estate, construction and tourism.
Soon after the formation of RAKIA in the year 2005, RAKIA undertook the development of the industrial parks which include the free zones and non free zones in the Al Hamra. In the same year the infrastructure and allied work were started in the Industrial parks which resulted in overall development of industries in the Emirate. In a period of 16 months from RAKIA inception 100% of the Free zone land (2.20 million Sqm) was leased out to 114 companies and also around 2.2 million sqm were leased out to 94 companies in the non-free zone Industrial area. With the success in attracting very large conglomerates around the world, RAKIA took the task of developing 25 million sqm of Industrial land in Al Ghail area of Ras Al Khaimah at the end of year 2006. RAKIA has already licensed over 220 manufacturing companies in Al Ghail Industrial and is self sufficient with a 64 MW of captive power plant. The strategy of RAKIA is to attract sustainable industries and RAKIA offeres investment advisory services and equity participation on selected projects. This has resulted in an atmosphere of trust among investors and generated a solid network of opportunities. As a result of that within a span of 3 to 4 years of its inception, RAKIA has been instrumental in attracting over US$2.5 billion of industrial investments alone, powering an unprecedented economic surge that has made Ras Al Khaimah as one of the fastest growing emirates in the UAE and the region. In response to Ras Al Khaimahs growing emergence as a business destination of choice, RAKIA established RAKOFFSHORE and the International Business Company (IBC) concept- a move designed to address the growing demand for offshore markets, and also complementing the emirate's ongoing economic diversification program. RAK OFFSHORE is an innovative initiative that establishes a true offshore facility and regulatory body providing complete offshore non-resident business registration and financial services through registered and reputed law firms. After successfully running industrial parks in Ras Al Khaimah, RAKIA is setting up a Free Industrial zone in Georgia (Eastern Europe), under the aegis of a subsidiary company of RAKIA. This is the first free zone in the Caucasus Region and is strategically located for easy access to the EU, Central Asia and Caucasus/ Eastern European markets. The free zone is being established next to the Poti Sea Port, which is also a subsidiary of RAKIA, the largest sea port in the Black Sea region and offers tremendous supply chain cost advantage for movement of goods. RAKIA is now in the expansion mode and has various Strategic Business Units, e.g. Education/ Technology Real Estate Transportation Investments Manufacturing & Energy RAK Offshore Real Estate Regulatory Authority (RERA). 59
RAKIA Milestones- Achievements Since its inception, over 5200 local and foreign investors have set up operations within the emirate under RAKIA, fueling an unprecedented pace of economic growth that has made Ras Al Khaimah one of the fastest growing emirates in the UAE and a regional economic force to reckon with. Out of which over 2300 are registered under RAKIA free zones and non-free and over 2800 are registered under RAK Offshore. No of Licenses under RAKIA Free Zones & Non Free Zones
Performance Highlights
5200 local and foreign investors have set up operations within the emirate under RAKIA. Out of which over 2300 are registered under RAKIA free zones and non-free and over 2800 are registered under RAK Offshore In RAKIA free zone and non free zone. About 85% of the investors have come from outside UAE Overall composition of license issued in RAKIA Free Zones & Non Free Zones so far-- Commercial24%, Industrial-23%, Consultancy-24%, Trading19% and Media-10%. Attracted close to US$ 2.5 billion worth of investments from 95 countries e.g. from the MiddleEast including UAE, Indian sub-continent including Pakistan, South-East Asia, US & Europe and other ME countries. Non-free zone (Industrial zone) Phase-I, II, Extn Zone and Ceramic zone at Al Hamra of total area of 2.83 million sqm have been completely leased out to 94 companies with 90% of these are in manufacturing.
Free Zone at Al Hamra with total area of 2.20 million sqr mtr have been completely leased out to about 114 companies registered in free Zone out of which 89% are in manufacturing. Al Ghayl industrial park, spanning 25 million sq mtr of which 6 million sq mtr is Free Zone. Already 5 million sqm have been leased out to 230 companies so far.
RAKIA ADVANTAGES Easy licensing procedure Single window clearance for approvals & permits Every investor gets personal attention Ready availability of power Issue of visit and residence visa under one roof Open door policy. Easy access to decision makers.
RAKIA has attracted very strategic companies in diverse industry segments ranging from glass and table ware, float glass, vehicle assembly, steel products, building materials, electrical equipment, rubber, plastics and food processing. The winning strategy that RAKIA adopted was to forge partnership with some investors who had viable projects.
This strategic partnership has given the investing companies competitive edge in the way of early implementation, fund and many functional support. RAKIA continues to have many strategic partners in European countries and also has its own representative offices in France and Germany. RAKIA has also participated in various events in Europe, Asia and also in the UAE to show case its investment opportunities to companies looking for investments in UAE and in the region. 60
Some of the events that RAKIA participated recently are the Hanover Industrial fair in Germany, Forum for Trade and Investment in Zurich organized by OSEC, Global India Forum organized by Horasis in Munich to name a few and many local events like Middle East Manufacturing Exhibition in Abudhabi and also BIG 5 in Dubai apart from hosting many business delegation in RAK from across the world. RAKIA has been giving importance for a knowledge based approach with its dedicated team conducting sector analysis and identifying and communicating with potential large Industrial investors in the target countries. It has in the past forged partnership with prominent international consulting companies line KPMG, PWC, Financial Times etc. for various studies and opportunity assessments. It is evident from the above table that the number of companies registered in RAKIA in Y2009 has increased by over 120% over year 2007, is indicative that the efforts of RAKIA to attract investment to RAK is showing fruitful results. In the year 2010, RAKIA is expecting to attract large number of Industrial companies as it has already seeing signs of improvement in many countries after the global economic meltdown during 2008-09.
Geographic Trend-Overall
The licenses RAKIA has issued show a remarkable balance among key sectors 25 per cent went to commercial companies, 24 per cent to consultancy and service companies, 23 per cent to industrial firms and the balance to trading and media companies. Investors have come from 96 countries around the world, out of which 36% are from the Middle East, 35% from Asia & Far East, 18% from Europe, and the balance from other parts of the world. RAKIA has experienced considerable increase in the registration of European companies from its previous years. Almost 85% of the European investments in RAKIA are coming from the six Industrialised countries like Germany, UK, France, Holland, Switzerland and Austria. RAKIA through its customer relationship approach has identified the investors need and has diversified its product offerings with the introduction of RAKIA Business Tower, a multi-stored commercial complex located in the Al Hamra region of RAK that houses corporate offices of clients from diverse segments. RAKIA has also developed warehousing facilities to cater to its growing needs and moreover, workers accommodation and studio flats were also made available. Besides managing industrial/business parks, RAKIA also delivers a wide range of complementary services to ensure that investment potentials are maximized. RAKIA offers investment advisory services and equity participation in selected projects, a key move that
KEY ENABLERS
Good infrastructure & logistic support system Excellent port facilities Competitive energy cost Easy access to GCC countries Strategic location being near to large and important markets Zero corruption and minimum bureaucracy Stable government and investor friendly policies Presence of local and international banks for project funding
61
reinforces investor trust and confidence. Due to Its investor-friendly policies and flexibility, brought in an array of international brands including Guardian Glass, Arc International, Franke, Duscholux, Mitsui, Kludi, Becker Industries, Kempe, Ashok Leyland and many others. RAKIA is a one stop shop for all the investor needs providing statutory support like issue of licenses, assistance in company formation, project approvals, investors visa, design approvals & construction permits, occupancy certificates etc.,
Among the myriad of advantages which the foreign investors avail of are full ownership of their businesses and a tax free haven apart from duty exemptions. Other key benefits offered to investors are 100 per cent capital and profit repatriation; easy availability of labour; easy licensing procedures; excellent port facilities; and absence of foreign exchange controls, trade barriers and quotas. Apart from the above advantages RAK had the unique traits, well differentiated from its competing locations like excellent terms for leasing, low cost of operations, favorable business environment, friendly government policies and high quality infrastructure. Because of all these, RAK was rated the Best Foreign Direct Investment destination in the Middle East for 2009 by Financial Times London in the year 2007.
Sector wise break-up- Non free zone Sector wise break-up- Free zone
Auto & Related Food 4% processing 2% Metal Products 36%
Food Wood Auto & processing products Related 2% 4% 2% Electricals 7% Rubber & Plastics 7% Chemicals 9%
Others 17%
Others 20%
RAKIA has signed a memorandum of co-operation with banks in Ras Al Khaimah in a move that will greatly benefit investors in the emirate. Under the agreement, the banks will provide financing to firms for their projects in RAKIA industrial parks. S&P affirmed its A long -term and A-1 short-term sovereign credit ratings on RAK which has build tremendous confidence for banks as well as investors. RAKIA's ongoing success largely reflects the Ras Al Khaimah Government's own success in establishing reforms, instituting new laws and regulations and enforcing policies that are hospitable to local, regional or international investors. Major companies in RAKIA Ashok Leyland of India is one of the biggest names in industry in the automobile industry. The company's integrated assembly plant is to build 1000 buses per year in RAK has started its operations in the year 2008. This is the first fully integrated Bus/trck manufacturing in the whole of GCC.
62
Zamil Steel of Saudi Arabia is a strong example of a company based in the Middle East that is starting to establish an important presence in RAK. Zamil, which is actually one of the largest industrial groups in the Middle East, registered with RAKIA in 2005. The company manufactures pre-engineered buildings and galvanized steel for electricity towers. The pre-engineered structures are mainly used for construction projects' show rooms, military bases, factories and temporary or semi-temporary structures. Arc International based in France came to RAK in 2004 to establish a production facility in the region for easier access to surging Middle Eastern markets. Arc International is one of the world's top producers of glassware and stemware. Guardian Glass of USA With an initial investment of approximately $115 million, established Guardian RAK with a production capacity of 700 tons of glass per day for use in automotive and construction applications, including high-performance coated glass. Global Glass Solutions has recently set up a glass processing facility in the Al Ghail Industrial Park in Ras Al Khaimah. The state-of-the-art factory is one of the largest glass-processing facilities in the region with up to 1,000 sqm glass processing capacity per day, providing clients in the region a complete array of world-class solutions for their processed glass requirements. The facility will manufacture all kinds of processing glass and will initially cater to markets in the UAE and the rest of the GCC.
INVESTMENT Million USD YEAR 60 10 35 20 10 30 10 130 55 50 30 25 25 25 150 100 70 35 30 105 100 30 -2009 2009 2008 2008 2008 2007 2007 2006 2006 2006 2006 2006 2006 2006 2005 2005 2005 2005 2005 2005 2004 2009 2009
NAME KEC Cables Pikko POSCO Becker Paints Novas Sealing Kludi RAK
SECTOR Industrial Cables Steel Connectors Steel Paints Manufacturing Industrial Gaskets Water Taps & Faucets
COUNTRY India Finland South Korea France UK Germany Australia USA Austria India Kuwait India Pakistan India Japan India Switzerland KSA Germany India France Jordan Germany
Kempe Engineering Industrial Equipments Guardian Industries Float Glass Franke Ashok Layland Kirby Steel Dabur India RAK Ghani Glass RAK Steel Mitsui Japan JBF RAK SS Kitchen Product Bus & Truck Assembly Steel Herbal Products Glass Containers Steel Products Heavy Fabrication Polyester Chips & Films
Falcon International Blue Ray DVD Zamil Steel Steel Duscholux Pioneer Cements Arc International Global Glass Solution Maico Gulf Sanitaryware Fittings Cement Tableware Glass mfg Ventilation system
RAK Steel, a joint venture of Ras Al Khaimah Investment Authority,is a new energy efficient and environment friendly steel rolling mills. The mill produces 500,000 tonnes per annum 8mm to 40 mm diameter steel deformed reinforcement bars (REBARS) to international British and American standards. JBF Industries has teamed up with Ras Al Khaimah Investment Authority in its initial stages and set up Polyster PET Resin Packaging chips plant in RAKIA. The cost of the plant would be around $100 million. Naturelle LLC Dabur International Subsidiary Naturelle LLC, subsidiary of Dabur International Ltd., has started its production in RAK in the year 2008. Dabur India Limited is one of the leading FMCG Companies in India, with interests in health care, personal care products, with powerful brands like Dabur Amla, Dabur Chyawanprash, Vatika, Hajmola & Real. Maico Gulf LLC Maico Gulf LLC, a reputed company in air ventilation systems has set up its manufacturing unit in Al Ghail Industrial Park. Maico Gulf LLC is a joint venture company between Maico Holding GmbH of Germany and Hira Holding BVI. The Maico products include Ventilation Fans, Industrial & Jet Fan, Smoke vents and Air Handling Units. 63
References
1. Hiromi Oki, Where intra-regional trade in East Asia is heading, JETRO Research Paper Vol. 06, 2008, 2. Changing Features of the Automobile Industry in Asia - Asia-Pacific Research and Training Network on Trade Working Paper Series, No. 37, July 2007 3. Dubai Chamber of Commerce Economic Bulletin, vol-4, issue-35, May 2007 4. OICA Statistics on global motor vehicles production 5. Trade Statistics-2008, Dubai Port & Customs, Dubai World 6. BMI report on UAEs Auto sector 2009 7. GOIC report on sector study on Automotive Industry in GCC 2009 8. Dubai Chamber of Commerce Economic Bulletin, vol-4, issue-35, May 2007 9. Dow Jones Factiva database of compaies.
64
Annexure-I
World Motor Vehicle Production By Country And Type In 2008
Source: OICA Statistics
Commercial vehicles 197,509 43,966 25,441 44,367 658,979 882,153 2,607,356 12,510 42,297 376 423,043 513,700 3,696 484,985 169,421 110,560 364,553 1,647,480 110,847 949,942 73,271 110,908 42,913 14,252 320,872 1,810 0 17,610 241,841 356,204 598,595 56,747 44,260 992,433 525,543 22,328 202,896 4,928,881 13,000 170,993 17,889,325
Country Argentina Australia Austria Belgium Brazil Canada China Czech Rep. Egypt Finland France Germany Hungary India Indonesia Iran Italy Japan Malaysia Mexico Netherlands Poland Portugal Romania Russia Serbia Slovakia Slovenia South Africa South Korea Spain Sweden Taiwan Thailand Turkey Ukraine UK USA Uzbek others Total
Cars 399,577 285,590 125,436 680,131 2,561,496 1,195,436 6,737,745 933,312 72,485 18,000 2,145,935 5,526,882 342,359 1,829,677 431,423 940,870 659,221 9,916,149 419,963 1,241,288 59,223 840,000 132,242 231,056 1,469,429 9,818 575,776 180,233 321,124 3,450,478 1,943,049 252,287 138,709 401,309 621,567 400,799 1,446,619 3,776,358 195,038 332,917 52,637,206
Total 597,086 329,556 150,877 724,498 3,220,475 2,077,589 9,345,101 945,822 114,782 18,376 2,568,978 6,040,582 346,055 2,314,662 600,844 1,051,430 1,023,774 11,563,629 530,810 2,191,230 132,494 950,908 175,155 245,308 1,790,301 11,628 575,776 197,843 562,965 3,806,682 2,541,644 309,034 182,969 1,393,742 1,147,110 423,127 1,649,515 8,705,239 208,038 503,910 70,526,531
% change 9.60% -1.50% -33.80% -13.20% 8.20% -19.40% 5.20% 0.90% 9.90% -24.40% -14.80% -2.80% 18.50% 2.70% 46.00% 5.40% -20.30% -0.30% 20.20% 4.60% -4.40% 20.00% -0.60% 1.50% 7.80% 17.40% 0.80% -0.30% 5.30% -6.80% -12.00% -15.60% -35.40% 8.30% 4.30% 5.10% -5.80% -19.30% 12.50% -15.80% -3.70%
65
Rank
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50
GROUP
Total TOYOTA GM VOLKSWAGEN FORD HONDA NISSAN PSA HYUNDAI SUZUKI FIAT RENAULT DAIMLER AG CHRYSLER B.M.W. KIA MAZDA MITSUBISHI AVTOVAZ TATA FAW FUJI ISUZU CHANA AUTOMOBILE DONGFENG BEIJING AUTOMOTIVE CHERY SAIC VOLVO BRILLIANCE HARBIN HAFEI GEELY ANHUI JIANGHUAI BYD GAZ MAHINDRA PROTON GREAT WALL PACCAR CHONGQING LIFAN M.A.N. JIANGXI CHANGHE CHINA NATIONAL PORSCHE LUAZ NAVISTAR SCANIA SHANNXI AUTO UAZ ASHOK LEYLAND KUOZUI
Total
69,561,356 9,237,780 8,282,803 6,437,414 5,407,000 3,912,700 3,395,065 3,325,407 2,777,137 2,623,567 2,524,325 2,417,351 2,174,299 1,893,068 1,439,918 1,395,324 1,349,274 1,309,231 801,563 798,265 637,720 616,497 538,810 531,149 489,266 446,680 350,560 282,003 248,991 241,553 226,754 220,955 207,711 192,971 187,053 162,816 157,306 129,651 125,084 122,783 108,053 107,422 106,377 96,721 90,548 90,264 79,874 75,220 72,181 71,485 67,891
CARS
55,846,163 7,768,633 6,015,257 6,110,115 3,346,561 3,878,940 2,788,632 2,840,884 2,435,471 2,306,435 1,849,200 2,048,422 1,380,091 529,458 1,439,918 1,310,821 1,241,218 1,175,431 801,563 489,742 637,720 552,096 531,149 489,266 446,680 350,560 282,003
LCV
10,652,432 1,102,502 2,229,833 271,273 1,991,724 33,760 463,984 484,523 85,133 317,132 516,164 368,929 330,507 1,356,610 83,159 105,754 128,233 160,966 64,401 47,101
HCV
2,598,495 251,768 24,842 46,186 68,715 134,033 151,759 135,658 395,123 7,000
HEAVY BUS
464,266 114,877 12,871 9,840
488,488
3,221
17,964 241,553 226,754 220,955 207,711 192,971 22,043 100,615 156,813 129,651 140,985 62,201 493
218,542
12,485
24,025
125,084 122,783 100,566 107,422 106,377 96,721 88,316 2,232 76,302 72,067 75,220 30,953 63,827 41,228 1,019 1,792 50,539 2,272 19,927 13,962 7,807 7,487
66
Annexure-III
UAE Imports & Re-exports of Vehicles in 2008 & 2007 in value & Number of units Source- Dubai Port & Customs(Dubai World)
Y-2008 Imports
Category Car Motor Vehicle for Transport of People Motor Vehicle for Transport of Goods Grand Total Value (AED) 26,818,609,248 2,811,911,927 4085,191,976 33,715,713,151 Units 408,903 16,202 50,462 475,567
Re-exports
Category Car Motor Vehicle for Transport of People Motor Vehicle for Transport of Goods Grand Total Value (AED) 6,660,332,310 242,806,432 1,490,063,296 8,393,202,038 Units 136,168 3,645 21,228 161,041
Y-2007 Imports
Category Car Motor Vehicle for Transport of People Motor Vehicle for Transport of Goods Grand Total Value (AED) 22,085,635,576 1,421,562,276 3,510,425,050 27,017,622,902 Units 450,325 22,390 69,426 542,141
Re-exports
Category Car Motor Vehicle for Transport of People Motor Vehicle for Transport of Goods Grand Total Value (AED) 4,936,000,803 122,293,508 1,133,725,977
6,192,020,288
67
Annexure-IV
Auto component Manufacturers in GCC Source: GOIC report on GCC Autosector 2009
SI. No 1 2 3 4 5
Company Name Gulf Exhaust National Automobile Industry Co Arabian Axles, Foundries and Spare parts Co Rezayat Friction Co Ltd Saudi Germany BrakeShoes manufacturing Co Ltd Akam Brake production factory Al Saraha Car Bodies Factory Arabic Car Bodies Factory Modern steel Fabrication & Exhaust factory Otaibi Silencer Factory Saudi Exhaust System Co Alkamil Mufflers Factory Saudi Filter Industry Company Al Mutlaq Filters Co
Address Factory 107, Road 3402, Maameer 634 PO Box 5938, Jeddah 21432 PO Box 8491,2nd ind city, Dammam 31482 PO Box 90, Al Khobar 31952 PO Box 42221, Jeddah 21541 PO Box 42004, Riyadh 11541 PO Box 5356, Hassa 31982 PO Box 14044, Dammam 31424 PO Box 1963, Dammam 31441 PO Box 294, Dammam 31411 PO Box 10873, Jeddah 21443 PO Box 147, Jeddah 21944 PO Box 31872, 2nd Industrial City, AlKhobar 31952 PO Box 2076,Industrial Estate, Phase#2,Jeddah PO Box 22287, Jeddah 21495 PO Box 120, Riyadh 11383 PO Box 7315, Riyadh 11642 PO Box 32013, Jeddah 21428 PO Box 32226, Jeddah 21426 PO Box 43130, Riyadh 11561 PO Box 171, Riyadh 11383
Phone 97317701126 +96626822000 009663 812 1267/1147 Ext:116 00966-3-8140363 / 0362 00966 26080783
6 7 8 9 10 11 12 13
Brakes Chassis Chassis Exhaust, shock absorber Exhaust, shock absorber Exhaust, shock absorber Exhausts, Mufflers Filters
KSA- Riyadh KSA-Dammam Hassa KSA-Dammam, Seihat KSA-Dammam KSA-Dammam KSA-Jeddah KSA-Jeddah-Taif KSA- Dammam
00966 1 4466624 5966 848 Factory- 9663 837 1968, office-8203353 00966 3 847 1350 00966 38472815 00966 2 6379281 966 2 7440736 00966 3812 1184 Extn 223
14
Filters
KSA-Jeddah
009662 636 9317 00966 2 650 4745 009661 265 0567 009661 422 0243 00966 2 637 9909 9662 608 1320, 6377124, 6378637 9661 2652325 966 1 242 9225
15 16 17 18 19 20 21
Al Nahdi Spare parts & Foundries & Filters Desert Filters Factory Saudi American cars Spare parts Industry Technoglass Co National Glass & Mirrors Ltd Saudi Lamino Ltd Car Seat & Cushion Factory Co
KSA-Jeddah KSA-Riyadh KSA- Riyadh KSA-Jeddah KSA- Jeddah KSA-Riyadh KSA- Riyadh
68
SI. No 22
Company Name Sasco Renewing Engine &Car Water Pumps Factory Al Nahda Radiator factory National Radiator Factory Zaid Md Drawaish & Partner Radiator Factory Al Aman For Radiator Factory Gulf Radiator Factory El Salama Radiator Factory Al Fawzan Radiator Factory Rifai Glass Reem Batteries & Power Appliance con SAOG Oman Filters Industry Co Sea Shore Car Bodies and Chassis Factory Nemeh Enterprises National Radiator Factory WLL(Nemeh Enterprises Al Khaleej Car Exhaust factory Skyline Exhaust Industry LLC Consolidated Filters Industry LLC Gulf Filters Establishment Reliable Fabricators LLC Gulf Engineering & Heavy Car Body Factory Lumi Glass Industry National Finland Auto Glass Wellfit Co Dolphin Industrial Ltd International Radiators Industry Sabah Car Radiator Industry Serck Services-Gulf ltd Automotive Ancillaries Ltd Al Baqa Mechanical & Eng. CO Ltd Aswan International Engineering Co LLC Dolphin Brake linings
Location KSA-Riyadh
Address PO Box 51880, Riyadh 11553 PO Box 121, 1st Ind. City, Dammam PO Box 2464, Dammam 31952 PO Box 7835, 2nd Ind. City, Dammam PO Box 98, Hafouf 31982 PO Box 124929, Jeddah 21342 PO Box 1043, 1St Ind city, Dammam PO Box 41411, Riyadh 11521 PO Box 1941, Kuwait 13020 PO Box 123, Rusail PO Box 45, Rusail 124 PO Box 60100, Al Khor PO Box 3410, Doha PO Box 99, Doha PO Box 1162, Dubai PO Box 3710, Dubai PO Box 26322, Dubai PO Box 2175, Abu Dhabi PO Box 16648, Dubai PO Box 18099, P.O. Box;113744
23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52
Radiators Radiators Radiators Radiators Radiators Radiators, brakes Radiators, brakes Glass Glass Filters Chasis Radiators, brakes Radiators, brakes Exhaust Exhaust Filters Filters Fuel injectors Fuel tank Glass Glass interior Radiators Radiators Radiators Radiators Spring Spring Valves
KSA-Dammam KSA- Dammam KSA-Dammam KSA-Dammam Hafouf KSA-Jeddah KSA-Dammam KSA- Riyadh Kuwait-Safat Oman Oman- Rusail Qatar- Al Khor Qatar-Ind. Area Doha Qatar- Ind. Area Doha UAE- Dubai UAE- Dubai UAE- Dubai UAE- Musafah UAE-Dubai UAE- Al Ain UAE- Dubai, Alquz, UAE- Umm Al Quwain UAE- Ajman UAE-Ajman UAE-Sharjah UAE-Sharjah UAE-Sharjah UAE-Dubai UAE- Ajman UAE-Dubai UAE
8571618/84 71472 966 38220679 009663 834 8559 9663 5864500 00966 2635 2590 00966 3 828 3205/6/3 009661 448 0612 (+965) 24817162- 24843719Tel.: (968) 2444 6191/92/93 00968 626 420/21 00974 472 2843/44 4607 962 4114782/43 76922 8801203 97143389775 3472221 5554300/55 43393 9714333 2399 9713782 4450 9714 340 3919
PO Box 20767, Ajman PO Box 20678, Ajman PO Box 388, Sharjah PO Box 44,Sharjah PO Box 5834,Sharjah PO Box 16755, Dubai PO Box 1546, Ajman PO Box 31550,Dubai
9716743 7012 9716743 2565 9716 5344999 9716 5341926 9716558 2607 8816645 9716 7435942 8851300 971-6-7432565
69
Annexure-V-A
UAE Imports & Re-exports of Parts and Accessories in 2006, 07 & 08 in value term Source- Dubai Port & Customs(Dubai World)
Table- Imports
HS Code 87081000 87082100 87082910 87083000 87083100 87083900 87084000 87085000 87087000 87088000 87089100 87089200 87089300 87089400 87089500 87089900 HS Code Description
Bumpers & parts Safety seat belts Luggage carriers Brakes and servo-brakes Mounted brake linings Brakes & servo-brakes & parts-II Gear boxes Drive-axles with differential, Road wheels & parts & accessories Suspension shock-absorbers Radiators Silencers & exhaust pipes Clutches & parts Steering wheels, columns & boxes Safety airbags Parts & accessories of vehicle body
Total
2008 ml AED 251.12 8.20 11.84 195.96 3.16 51.55 71.61 31.37 283.27 200.00 65.20 27.32 441.09 182.83 6.55 8,558.91 10,389.97
2007 ml AED 142.68 5.61 21.05 1.25 41.62 404.35 56.34 48.05 220.27 304.48 51.66 12.18 502.78 181.53 0.05 6,855.48 8,867.91
2006 ml AED 78.55 2.58 6.38 0.00 42.87 161.27 40.26 32.06 196.58 242.86 40.23 12.26 228.04 97.83 0.00 5,391.18 6,591.61
Table- Re-exports
HS Code 87081000 87082100 87082910 87083000 87083100 87083900 87084000 87085000 87087000 87088000 87089100 87089200 87089300 87089400 87089500 87089900 HS Code Description
Bumpers & parts Safety seat belts Luggage carriers Brakes and servo-brakes Mounted brake linings Brakes & servo-brakes & parts-II Gear boxes Drive-axles with differential, Road wheels & parts & accessories Suspension shock-absorbers Radiators Silencers & exhaust pipes Clutches & parts Steering wheels, columns & boxes Safety airbags Parts & accessories of vehicle body
2008 ml AED 58.96 30.30 1.08 13.13 0.20 9.69 13.35 5.14 91.14 97.48 17.22 4.03 108.73 88.99 0.62 3,665.59 4,206.72
2007 ml AED 48.96 31.68 7.99 0.09 5.08 74.83 25.48 12.54 100.38 84.89 68.65 4.32 128.75 26.28 0.01 3,072.04 3,693.54
2006 ml AED 26.28 17.85 1.00 0.00 4.75 31.45 15.89 6.75 91.03 70.12 46.66 1.52 78.92 6.10 0.00 2,088.00 2,487.77
70
Annexure-VB UAE Imports & Re-exports of Parts and Accessories in 2006, 07 & 08 in no of units (Source- Dubai Port & Customs(Dubai World)
Table- Imports
HS Code 87081000 87082100 87082910 87083000 87083100 87083900 87084000 87085000 87087000 87088000 87089100 87089200 87089300 87089400 87089500 87089900 HS Code Description
Bumpers & parts Safety seat belts Luggage carriers Brakes and servo-brakes Mounted brake linings Brakes & servo-brakes & parts-II Gear boxes Drive-axles with differential, Road wheels & parts & accessories Suspension shock-absorbers Radiators Silencers & exhaust pipes Clutches & parts Steering wheels, columns & boxes Safety airbags Parts & accessories of vehicle body
2008 790,993 34,606 57,820 1,743,193 3,612 21,558 154,678 771,396 2,889,040 1,169,773 369,700 115,346 1,835,596 193,487 20,572 30,309,298 40,480,668
2007 205,650 162,357 53,912 10,396 98,944 537,965 49,022 21,011 1,385,680 410,777 119,072 71,800 394,930 71,948 10 5,606,998 9,244,910 2007 21700 2136 2675 125,067 5,702 15,192 72,717 25,631 191462 266,495 190,185 5,745,781 29,504 143,086 12 3,151,127
9,988,472
2006 210,030 247,485 39,083 0 73,550 445,730 20,354 10,002 1,051,517 508,149 94,541 46,849 338,029 70,168 0 3,684,515 6,861,373 2006 29,332 46676 9411 0 14,199 75091 6335 5,225 262,776 113710 77,448 7025 94577 7,022 0 2326588
3,075,415
Table- Re-exports
HS Code 87081000 87082100 87082910 87083000 87083100 87083900 87084000 87085000 87087000 87088000 87089100 87089200 87089300 87089400 87089500 87089900 HS Code Description
Bumpers & parts Safety seat belts Luggage carriers Brakes and servo-brakes Mounted brake linings Brakes & servo-brakes & parts-II Gear boxes Drive-axles with differential, Road wheels & parts & accessories Suspension shock-absorbers Radiators Silencers & exhaust pipes Clutches & parts Steering wheels, columns & boxes Safety airbags Parts & accessories of vehicle body
2008 175,947 430,409 6,764 54,364 603 23,117 24,570 39,001 536,184 194,847 107,738 78,261 562,674 497,625 458 28,208,085 30,940,647
71
Annexure-VI-A
UAE Trade On Tyre & Tyre Products-2008
Source- Dubai Port & Customs(Dubai World)
RE-EXPORT Units
9636233 2198087 9062 153801 118,722 100,365 50,155 4,520 5193 11,167 21,847 448235
Value (AED)
1853365027 1190378134 34923969 9795180 14,681,597 22,579,890 47,346,029 9,167,141 969519 3,170,660 54,418,049 95787325
Value (AED)
1324694809 284566493 4738330 7603778 9,071,693 71,065 2,678,296 1,179,262 247606 1,147,181 8,757,438 58258875
Units
4898306 565151 1054 37086 44,959 405 13,644 225 603 3,444 146,936 159414
3,336,582,520
12,757,387
1,703,014,826
5,871,227
SUB-TOTAL USED PNEUMATIC TYRES Used pneumatic tyres, of rubber TYRE TREADS AND TYRE FLAPS Solid or cushion tyres, tyre treads & tyre flaps, of rubber INNER TUBES For motor cars buses or lorries.
For bicycles.
9,580,830 199842
26,400 3702
9,825,984 12043841
20,959 268279
11,952,010
88229683 11836720 16855195
135,866
531643 692572 135604
2,098,940
40286988 5121461 10736405
1,902
206381 622739 55839
SUB-TOTAL TOTAL
116921598 3,475,236,800
1359819 14,283,174
56144854 1,783,128,445
884959 7,047,326
72
Annexure-VI-B
UAE Trade On Tyre & Tyre Products-2007
Source- Dubai Port & Customs(Dubai World)
RE-EXPORT
Value(AED) 1260471315 404045338 5602363 9265834 7,360,456 271193 2916918 111,808 208195 1,274,758 5,893,978 4,475,423 47336695 1,749,234,274 Unit 4629483 1323997 5360 46425 14,083 195 7563 117 47 6,697 1,357 4,559 65397 6,105,280
RETREATED TYRES
of a kind used on motor cars (including station wagons & racing cars) of a kind used on buses or lorries. of a kind used on aircraft. Other SUB-TOTAL 865890 5322149 4,372,001 478971 11,039,011 3746 26467 2,396 1599 34,208 6410729 1816104 2,499,150 468865 11,194,848 1819 1570 638 2583 6,610
INNER TUBES
For motor cars, buses or lorries. For bicycles Other SUB-TOTAL Total 56177100 8076551 2,370,762 66,624,413 2,786,931,799 418678 68390 23,116 510,184 12,192,330 23376127 2759298 5,896,957 32,032,382 1,809,297,875 54742 8055 38,893 101,690 6,243,559
73
Annexure-VII
Key Global Tyre Manufacrurers Contact Details
Company
Bridgestone Michelin
Contact Information
Shoshi ARAKAWA, Chairman of the Board , 10-1 Kyobashi 1-chome, Chuo-ku, Tokyo, 104-8340, Japan, Tel- 81 3 35636822/ 81-3-3535-2553 Chairman Supervisory Board: ric Bourdais de CharbonnireCompagnie Gnrale des tablissements Michelin, 23, place des Carmes-Dchaux, 63040 Clermont-Ferrand, France, Tel. +33-4-73-32-20-00/ Fax +33-45-66-15-53 Chairman, President, and CEO: Robert J. (Bob) Keegan, The Goodyear Tire & Rubber Company, 1144 E. Market St.Akron, OH 44316-0001,OH, USA, Tel. 330-796-2121/ Fax 330-796-2222 Elmar Degenhart (CEO and Chairman of the executive board), Continental AG, Vahrenwalder Strasse 9, D-30165 Hannover, Germany, Tel. +49-511-938-01/ Fax +49-511-938-81-770 Mitsuaki Asai, Chairman, Sumitomo Rubber Industries, Ltd.3-6-9 Wakihama-cho, Chuo-ku, Kobe 651-0072, Japan Tel. +81-78-265-3004/ Fax +81-78-265-3113 Kenji Nakakura, President & CEO, Toyo Tire & Rubber Co., Ltd., 1-17-18 Edobori, Nishi-ku, Osaka 550-8661, Japan Tel. +81-6-6441-8801/ Fax +81-6-6446-2225 Tadanobu Nagumo, President and Representative Director, The Yokohama Rubber Co., Ltd. 36-11, Shimbashi 5-chome, Minato-ku, Tokyo 105-8685, Japan, Tel. +81-3-5400-4531/ Fax +81-3-54004570 Jong Ho Klm, President and CEO, Kumho Tires Co Inc, 555, Schon-dong, Gwangsan-gu, Guangju, Korea, TEL- 062-9402114/ 82-2-6303-8297 Cho Yang-Rai , Chairman, Hankook Tire Co., Ltd. 647-15 Yeoksam-dong, Gangnam-gu, Seoul 135723, South Korea Tel. +82-2-2222-1000/ Fax +82-2-2222-1100 Roy V. Armes, Chairman, President, Cooper Tire & Rubber Company, 701 Lima Ave., Findlay, OH 45840, OH , USA Tel. 419-423-1321, Toll Free 800-854-6288, Fax 419-424-4212 Henrik Therman, Chairman, Nokian Tyres plc, Pirkkalaistie 7, FIN-37101 Nokia, Finland, Tel. +358-10-401-7000/ Fax +358-10-401-7799 Dr Enki Tan, Chairman, No.280-2,linhong Road, Changning District, Shanghai 200335,P.R.China Tel- (86-21) 2207 3333/ Fax- (86-21) 2207 3000 R. P. Goenka, Chairman, CEAT Limited, CEAT Mahal, 463, Dr Annie Besant Road, Worli, Mumbai 400 030 Telephone: +91 22 2493 0621/ Fax: +91 22 2493 8933 MRF Limited, 124, Greams Road, Chennai - 600 006, India. Phone : 91 - 44 28292777/ Fax : 91 - 44 - 2829 1844 / 0562 Onkar S Kanwar (CMD), Apollo Tyres Limited, Apollo House, 7 Institutional Area, Sector 32, Gurgaon 122001 , Haryana, India Tel: +91 124 2721000/ Fax- 91 124 2721000 H.S.Singhania, Chairman, JK Tyre and Industries Ltd. Link House,, Bahadurshah Zafar Marg, New Delhi - 110 002 Tel-91-11-23311112-7/ Fax- 91-11-23322059 Marco Tronchetti Provera (Chairman of the board and CEO),, Pirelli Group, Viale Sarca, 222 Pirelli & C. S.p.A 20126 Milano, Tel- +39 02 64421/ +39 02 6442 2670
Yokohama
Kumho
Hankook
Cooper Nokian
GT Radial CEAT MRF Apollo JK Tyre Pirelli
74
Annexure-VIII
UAE Trade On Vehicle Battery (Accumulators)-2006-2008
Source- Dubai Port & Customs(Dubai World)
YEAR2008
HS Code 85071000 85072000 85073000 85074000 85078000 85079000 HS Code Description Lead-acid electric accumulators Lead-acid electric accumulators, Nickel-cadmium electric accumulators. Nickel-iron electric accumulators. Electric accumulators, n.e.s. Parts of electric accumulators. Total
IMPORTS Value (AED) 540,685,783 98,882,052 31,085,088 211,193 51,760,920 3,736,475 726,361,511 Units 1,486,667 174,370 140,181 71 146,718 35,947 1,983,954
RE-EXPORTS Value (AED) 195,855,500 6,146,077 37,734,888 381,650 6,596,153 483,097 247,197,365 Units 729,548 14,022 248,898 62 2,607 5,393 1,000,530
YEAR2007
HS Code : 85071000 85072000 85073000 85074000 85078000 85079000 HS Code Description : Lead-acid electric accumulators Lead-acid electric accumulators Nickel-cadmium electric accumulators. Nickel-iron electric accumulators. Electric accumulators, n.e.s. Parts of electric accumulators. Total Value(AED) 447973827 54743681 15745827 81864 27462288 7843938 553,851,425 Unit 1330067 101951 182782 878 70435 18515 1,704,628 Value(AED) 198792553 2092049 14497591 152967 11010986 584591 227,130,737 Unit 648740 7704 3608 1469 3921 3997 669,439
YEAR2006
HS Code : 85071000 85072000 85073000 85074000 85078000 85079000 HS Code Description : Lead-acid electric accumulators Lead-acid electric accumulators, Nickel-cadmium electric accumulators. Nickel-iron electric accumulators. Electric accumulators, n.e.s. Parts of electric accumulators. Total Value(AED) 251928815 34952404 20118595 337725 23279397 4295687 334,912,623 Unit 1217169 78544 178373 1634 71290 193063 1,740,073 Value(AED) 126624400 2716978 10528256 134328 10452681 654809 151,111,452 Unit 486322 15272 7113 1553 19870 6732 536,862
75
Annexure-IX
UAE Trade On Electrical Ignition system - 2006-2008
Source- Dubai Port & Customs(Dubai World)
Year-2008
HS Code 85111000 85112000 85113000 85114000 85115000 85118000 85119000 Year2007 HS Code : 85111000 85112000 85113000 85114000 85115000 85118000 85119000 Year2006 HS Code : 85111000 85112000 85113000 85114000 85115000 85118000 85119000 HS Code Description Sparking plugs. Ignition magnetos; magneto-dynamos;etc Distributors; ignition coils. Starter motors & dual purpose starter-generators. Generators for internal combustion engines, n.e.s. Electrical ignition or starting equipment Parts of electrical ignition or starting equipment Total Value (AED) 65,783,493 206,981 10,374,531 23,277,776 30,529,240 7,437,748 21,460,893 159,070,662 Units 2,410,352 1,052 47,824 26,943 58,876 44,770 115,850 2,705,667 Value (AED) 24,946,131 596,664 2,240,557 10,811,500 35,581,344 2,909,280 7,391,844 84,477,320 Units 25,039 1,656 4,961 12,626 16,917 2,936 9,076 73,211
HS Code Description : Sparking plugs. Ignition magnetos; magneto-dynamos;etc Distributors; ignition coils. Starter motors & dual purpose starter-generators. Generators for internal combustion engines, n.e.s. Electrical ignition or starting equipment Parts of electrical ignition or starting equipment Total
HS Code Description : Sparking plugs. Ignition magnetos; magneto-dynamos;etc Distributors; ignition coils. Starter motors & dual purpose starter-generators. Generators for internal combustion engines, n.e.s. Electrical ignition or starting equipment Parts of electrical ignition or starting equipment Total
76
Annexure-X
UAE Auto Dealers
Company AGMC Al-Futtaim Al Ghandi Auto Al Habtoor Motors Al Khoory Automobiles Al Majid Motors Al Nabooda Automobiles
Brand BMW, MINI, Alpina Toyota Motor, Lexus Fiat, Proton, Chevrolet, General Motors Mitsubishi Motors, Galloper Subaru Kia Motors, Renault Volkswagen, Porsche, Audi Ford Motor*, Rover, Range Rover, Jaguar Cars,
Coverage area UAE UAE Dubai, Sharjah UAE Dubai, Northern Emirates UAE UAE
Al Tayer Motors Al Yousuf Motors Arabian Automobiles Autostar Trading Bin Dhahir Motors Galadari Automobiles Gargash Motors Genavco Al Jazira Motors Juma Al Majid Est Liberty Automobiles Nadoo Motors National Auto Swaidan Trading Trading Enterprises Abu Dhabi Motors Al Masaood Automobiles Ali and Sons Motors Bin Hamoodah Autos Emirates Motor Company Omeir Bin Youssef Western Motors
Ferrari, Maserati GM Daewoo Auto & Technology, Daihatsu Motor Nissan Motor, Renault koda Auto SEAT Mazda Motor, Mahindra & Mahindra, Bajaj Tempo Mercedes-Benz Isuzu Motors Lamborghini Hyundai Cadillac, Hummer, Opel , Chevrolet Pudmani, LDV General Motors , SsangYong Motor Peugeot Jeep+, Honda Motor, Chrysler, Volvo Cars, Dodge BMW Nissan Motor Porsche, Volkswagen, Audi Opel, General Motors Mercedes-Benz Peugeot Fiat, Jeep
UAE UAE Dubai and Northern Emirates UAE UAE UAE Dubai, Northern Emirates UAE UAE UAE UAE UAE UAE UAE UAE Abu Dhabi Abu Dhabi Abu Dhabi and Al Ain Abu Dhabi Abu Dhabi Abu Dhabi Abu Dhabi
77