ECG — 2025-12-01
News from ECG
In 2025 ECG-the Association of European Vehicle Logistics visited the Middle East markets of the United Arab Emirates (UAE) and the Kingdom of Saudi Arabia (KSA). This visit was based on the data received for growth in new car sales in this region, as well as ambitious plans to develop a local vehicle production base.
Today, ECG presents the latest Business Intelligence report on this region, following on from the visit and meetings in the region with key stakeholders.
Market Power:
The Gulf Corporation Council (GCC) region, which comprises of UAE, KSA, Bahrain, Oman, Kuwait and Qatar is a group of countries with significantly high disposable income levels, coupled with strong GDP growth forecasts.
Data from forecast provider S&P Global Mobility was upgraded in the mid-year update with increases in growth rates for both UAE and KSA—the two largest markets in the region. UAE volume was raised by 5.5% while KSA was raised by 6.8%. Overall the numbers point towards annual sales of over 1.5 million units in 2025. While this number seems relatively low it is the ambitious plans in the region coupled by the low cars per 1,000 people that has piqued our attention.
Data from the IMF highlights GDP growth rates of over 4% in Saudi Arabia and the UAE. Meanwhile GDP per capita data is USD79,500 on average for KSA and UAE. This number is higher than Germany (USD73,550) and the UK (USD 63,760) as per latest data from the IMF.
Meanwhile the number of cars per 1,000 people in the EU is on average close to 600 while in Saudi Arabia this is estimated at just under 200 while in UAE the number has risen post Covid to 540. But the population size of Saudi Arabia is over 34.5 million inhabitants, which highlights the vast potential for growth in new car sales.
Produce & Export:
So what about production in the region?
Data from S&P Global Mobility shows KSA as the only country to have any local production amongst the GCC nations. By 2030 the forecast shows over 100,000 unit production.
But what of KSA’s own plans? The Kingdom aims to have over 500,000 units of annual production by 2030. For this to happen there are new production plants in the country and new brands. Ceer, a new local brand, has an annual target of 240,000 units by 2030. Production is already underway with the first model to be released in 2026. Lucid also has a production plant in the Kingdom, which has a target of producing over 20,000 units per annum of premium electric vehicles, with models already produced at the plant. Meanwhile other OEMs have also shown an interest with Hyundai already in the midst of constructing a plant in the King Salman Automotive Cluster where Ceer and Lucid are already based. While on the other side of the country, KG Mobility aka Ssangyong have a production or assembly plant in Jubail.
Recent announcements highlight interest from commercial vehicle manufacturers such as Ashok Leyland and Chinese automaker BAIC Foton. Meanwhile Chery has a strong interest in the region. And just last week Stellantis signed an MoU to look into local production in KSA.
In the UAE, the new brand Rox Motors has announced plans with W Motors to assemble and produce locally in Abu Dhabi. W Motors has identified itself as a contract manufacturer for the UAE region.
So what about export sales potential?
The GCC region itself has a spate of no tariff policies between the 7 nations, but it is the GAFTA agreement that is pulling the interest for localized production. The Greater Arab Free Trade Area (GAFTA) includes 17 countries, that is 10 additional countries to the GCC. As per the 2005 agreement, all goods of Arab origin are exempt from customs duties and taxes when products are exchanged between member states. And the rule for the automotive sector states that a 40% local content rate suffices.
This is the main thrust, and ambition for the Kingdom of Saudi Arabia. To become a production base for export to GAFTA and beyond. Meanwhile the ports of Jebel Ali and Khalifah highlight the vast volume of cars transhipped to other regions making these ports already a hub for exports.
High Demand to Qualify People:
The Middle East countries of KSA and UAE are keen to encourage the use of international standards, and to enhance the qualifications amongst the local hires. This naturally paves the way for ECG to share the highly prized quality manuals developed with the top players in the industry and for the benefit of all, with the aim to reduce inefficiencies and create a harmonized global vehicle logistics system. ECG will now work to develop a framework to offer a level of training to qualify vehicle logisticians from countries outside of Europe to gain from the knowledge base.
Urge European OEMs to look beyond:
In recent weeks it has been a positive sign to see developments from European OEMs in the GCC region. Mercedes has witnessed solid growth in Saudi Arabia, with industry sources stating year-to-date sales are up 21.9% there. Meanwhile in the last few days Skoda has announced its entrance to the market there with new showrooms across the Kingdom. From a logistics point of view, new announcements from carriers state they now have Europe to Jebel Ali and Jeddah ro-ro services on offer further highlighting the potential to access these new growth markets.
Next Steps:
ECG now asks Members and Partner companies to register their interest in a delegation visit to the region, potentially towards the end of 2026. To launch ECG activities for the Middle East region, an introductory Webinar will be organised in Q1. Should the demand be adequate ECG will organise a high-profile visit in Q4 to give our members further access to the market potential there.
ECG Members can read the full report here.