Commercial vehicle market set for revival due to increased demand in Africa and Middle East markets
A concerted focus on infrastructure development paired with economic diversification is expected to revive the Gulf region's commercial vehicle market, providing impressive business opportunities for auto manufacturers and aftermarket sellers.
According to a March 2017 report from analysts TechSci Research, approximately 240,000 commercial vehicles (CVs) were sold in the Gulf Cooperation Council (GCC) in 2016, including light, medium, and heavy trucks, vans, and buses.While that was down on the peak number of CVs sold over the last five years – 380,000 in 2014 – TechSci estimates a steady annual growth of trucks and buses on the region's roads from 2017-2022 of nearly three per cent and nine per cent respectively.
Saudi Arabia, Oman and the UAE dominated GCC truck sales last year, comprising more than 80 per cent of the market, while over the last few years the region has emerged as one of the world's prominent bus importers on account of labour and staff transportation and luxury buses used during Hajj, the annual Islamic pilgrimage to Mecca in Saudi.
Meanwhile, Frost & Sullivan, another analyst, estimates the region will be home to 1.8 million CVs by 2020, which in turn will fuel demand for CV parts and accessories, the value of which will reach US$5.6 billion.
GCC countries, which are traditionally major exporters of oil and natural gas, are making a concerted effort of economic diversification, and verticals such as logistics, construction, tourism and public transport, accompanied by large-scale expansion of civic infrastructure projects, will fuel demand for commercial vehicles and aftermarket services.
Saudi Arabia, Oman and the UAE dominated GCC truck sales last year, comprising more than 80 per cent of the market.
Many of the Truck Competence exhibitors fall under the Parts & Components and Electronics & Systems sections at Automechanika Dubai. With more than 1,100 exhibitors combined, the two sections form the largest of the six dedicated product sections of the annual trade fair.
ZF Group from Germany is a global leader in driveline and chassis technology for cars and commercial vehicles, and a prominent Truck Competence exhibitor at Automechanika Dubai.
The Friedrichshafen-headquartered Company, which achieved sales of €35.2 billion in 2016, will for the first time in the Middle East, display its complete portfolio of PC and CV applications under the well-established product brands SACHS, LEMFÖRDER, TRW and Openmatics.
"A significant portion of the Middle East passenger car and commercial vehicle population is equipped with ZF components," said Khalid Alexander Sabbah, Managing Director of ZF Services Middle East.
French company SAE-SMB, a specialist manufacturer of axles, suspensions, and related spare parts for trailers, semi-trailers, low loaders, tankers, and forestry trailers. Davide Radrizzani, Managing Director of the French Branches for SAE, said the company has big plans for the Middle East and Africa, and hopes to get a gauge of the market.
"Algeria, Morocco and Tunisia already represent about 30 per cent of our annual turnover, and over the next three years our strategy is to not just develop the sub-Saharan and West African markets, but also the Middle East," said Radrizzani.
"The African automotive and truck business will be booming for the next 10 years and we want to be present for this new opportunity. We know that Dubai is the best hub to develop these markets, and we hope to get a clear picture of the wider region. It will be our first initiative before opening our branch office in Middle East as our next strategic step."
Hastings Manufacturing from the USA is another Truck Competence exhibitor that is gearing up for more business growth in the Middle East and Africa. The Michigan Company has been a leader for more than 100 years in piston ring manufacturing for nearly any type of application, from automotive and truck, to agriculture, industrial, small engine, as well as marine and high performance engine applications.Romy Laxamana, Vice President of Business Development said: "The Middle East and African market is a very important part of the strategic growth plans for Hastings Manufacturing. Both of these markets present an opportunity for our company to expand our global reach by leveraging our technology and our brand to reach new customers in this region.
"Historically, we've done business in the Middle East through USA based trading companies. The company recently pivoted to doing business directly with major regional importers and distributors to be closer to the customer and provide better service and competitive pricing."
