Despite the world shifting gears towards hybrid and electric vehicles (EV), a new study claims that UAE and Saudi Arabia customers still regard price as the top criterion when buying a car.

According to a report by strategy and growthconsultants Simon-Kucher, price is the number one driver in making automotive purchase decisions for customers in the UAE and Saudi Arabia.

The ‘Global Automotive Study 2023’ shared further insights into the purchasing behaviour of automotive customers from the two GCC states, with other price-related attributes such as maintenance and energy consumption cost coming in second when determining which car to buy.

Chinese brands

Findings also revealed that while Japanese, German and US auto brands were the top three choices in both, the UAE and Saudi Arabia, Chinese-made vehicles were also gaining momentum, especially in the kingdom.

While 83% preferred German car brands in Saudi Arabia, 57% also answered that they would be open to Chinese made vehicles as well, which are traditionally more competitively priced.

This trend is not limited to the GCC alone, with France’s Renault announcing in July it was aiming to slash production costs for its electric models by 40% to thwart a swarm of cheap EVs in Europe.

In 2022, Chinese car makers had a 9% share of Europe’s EV market, according to forecasts by consultancy Inovev, with current market trends prompting Carlos Tavares, the CEO of Peugeot-to-Fiat carmaker Stellantis to describe this Chinese push as an “invasion” in an interview with Reuters.

Push for EVs

Demand for EVs is also seeing an uptick in the GCC, with 72% of customers in Saudi Arabia saying in the Simon-Kucher report that they would consider an EV for their next vehicle purchase, as customers actively look for sustainability options with the climate crisis looming on the horizon. The UAE ranked ahead of the Kingdom with 79% saying they would consider buying an EV in the future, with government incentives and cheap charging options furthering this demand.

A recent report by evaluation service providers Compare the Market Australia also named the UAE for having one of the most affordable EV charging infrastructures. The UAE scored well on both, the EV and gasoline metrics of the report, with a 100km worth of EV charge averaging $1.02. The UAE also came third for the most affordable for petrol prices, with an average of $5.57 per 100km. Based on findings in the report, a driver in the UAE could save 81.77% of their average fuel bill by going electric.

Over the past few years, the UAE has been actively pushing its green agenda, with the country’s willingness to adapt to EVs landing it on the 8th position of the global electric mobility readiness index, according to findings of a 2022 Arthur D. Little report. The country’s EV market is also forecasted to grow at a CAGR of 30% between 2022 and 2028.

Fuelling this growth are government initiatives such as the Global EV Market launched in May to create incentives for people to own EVs. The move aims to facilitate investment in the UAE network of EV charging stations and install them across federal buildings, roads, and truck rest stops.

Despite range anxiety remaining a major concern, a term often used to describe the fear that a vehicle may not reach its destination due to an insufficient charge, the UAE is actively addressing this through several initiatives. Dubai’s utility provider DEWA recently announced its plans to install 1,000 public charging stations in the emirate by 2025, an increase from 620 at the end of 2022.

Meanwhile, in Abu Dhabi, the construction of an assembly facility has been completed last year, which will allow NWTN, a Dubai-based startup, to establish and construct an integrated production line of its green EV products.

Other findings

In recent years, autonomous driving technology has also rapidly evolved, allowing vehicles to navigate and operate on roads with minimal or no human intervention. This prospect has gained the interest of customers in the GCC, with the report stating that 80% of respondents in the UAE and Saudi Arabia expressed interest in this technology.

Despite the excitement though, questions regarding accountability in case of accidents in autopilot mode remain unanswered. Notably, 64% of respondents believed that insurance providers should cover damages versus 33% on manufacturers, highlighting the need for clear liability frameworks to address potential incidents.

(Writing by Bindu Rai, editing by Daniel Luiz)