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  • Novel Growth Avenues in the GCC Light Vehicle Aftermarket
    Innovative business models propel future growth potential

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    In 2020, the Gulf Cooperation Council (GCC) region faced significant challenges due to the COVID-19 pandemic and oil price crash. Gross domestic product (GDP) in GCC nations contracted by 5%–10% in 2020. The GCC population dropped by 3%–5% due to expatriate exodus. Every industry and sector faced multiple disruptions. The GCC light vehicle aftermarket also evolved due to a market demand decline as vehicle miles traveled (VMT) decreased, the supply chain was disrupted, and new business models (such as door-to-door service) emerged to serve the market in the new normal.

    During an economic recovery, cost-efficiency is a prime purchase decision factor. For example, after establishing partnerships with 2 online platforms, a small, 6-year-old garage in Dubai grew by 30% in H2 2020 by offering cheaper service contracts targeting American vehicles to win over customers from dealer service centers nearby; China-made car tires in Kuwait gained market share from 38.0% in 2014 to over 50.0% in 2020. Overall, the market witnessed a trend of independent aftermarket brands overtaking the original equipment (OE) brands in 2020.

    With the economic diversification and development of non-oil industries, the GCC region’s economy is expected to recover and grow from 2021 onward. National schemes in GCC countries, such as Saudi Vision 2030, Qatar 2030 and UAE 2030, are projected to be major long-term growth drivers. Global events like Expo 2020 Dubai (rescheduled to October 2021) and the 2022 FIFA World Cup in Qatar are likely to attract millions of visitors to the region and trigger a demand surge in multiple industries, including the light vehicle aftermarket.

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