GCC Light Vehicle Aftermarket Outlook, 2021
Innovative Business Models Propels Future Growth Potential
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.