Why the Region Is One of the Most Promising for U.S. Specialty-Equipment Manufacturers

	Demand is strong for products for the Chevy Cruze as well as other cars and light trucks selling well in the Middle East.

This is the second in a two-part series on the Middle East Market—specifically the market in the United Arab Emirates (UAE) and the five neighboring countries comprising the Gulf Cooperation Council (GCC), which are Bahrain, Kuwait, Oman, Qatar and Saudi Arabia. A number of factors make this market of 7.3 million vehicles particularly attractive, including the high regard for U.S. products and considerable discretionary income. SEMA members making products for light trucks and American musclecars will find strong demand for those applications.

Unmet Demand

Consumers and distributors in both markets complain of shortages of a variety of quality specialty-equipment products. “The entire Gulf region is exploding with potential buyers, and there is an overwhelming need for consumer education and demand for quality products,” said Simon Atik of Evosport. Mitch Perera, sales and marketing manager for Liberty Motorsports, said that there is a shortage of appealing products for a wide range of makes and models.

Made in America

The “Made in America” mark is considered a sign of quality and innovativeness among global consumers. Middle East consumers recognize and appreciate high-quality products and are significantly influenced by American aftermarket trends and brands. As a result, U.S. products are very popular in the Middle East for street, off-road and track applications. Local enthusiasts are increasingly aware of and deliberately seek U.S.-branded products. TV shows, such as TLC’s “Overhaulin’,” MTV’s “Pimp My Ride” and Universal Studio’s The Fast and the Furious films also played a great role in generating interest in American-style tuning. As brand awareness and education among consumers and the trade continues in both markets, U.S. brands are bound to benefit.

Standard of Living

Consumers in the UAE enjoy one of the highest standards of living in the world, with gross domestic product (GDP) per capita (purchasing parity basis) of $55,000 USD, compared to $46,000 USD in the United States. Auto enthusiasts armed with high disposable incomes are passionate about their vehicles and are seeking the latest products to outfit their luxury cars, sport-compact cars and light trucks to make sure their personalized vehicles stand out on the road.

“We like to believe that Americans love their cars and this hobby more than anything else,” said Bob Scheid of Seres LLC. “I really think we have some competition with what I saw in Dubai. Not only is there passion, but they also have the disposable income to spend.”

Dialogue With Local Government Officials

	There is a large and growing market for classic cars throughout the Middle East region.

UAE government officials have reached out to SEMA to assist in the creation of laws and regulations regarding vehicle customization. In March 2011, SEMA and the UAE government signed a Memorandum of Understanding (MOU) for SEMA to provide advice to national officials as they seek to develop laws and regulations governing the use of specialty-equipment products.

“The purpose of this MOU is to establish a formal exchange of information and an ongoing dialogue as the UAE government seeks to develop a legal framework to support its fledgling specialty-equipment market,” said UAE official Mohamed Salih Badri.

Vehicle Sales Growing

Sales of SUVs and other light trucks are the region’s fastest-growing sector—a segment for which U.S. firms excel in making specialty-equipment products. And the Middle East market continues to grow. Silverado sales this year are up more than 53% over 2010, and the Jeep market continues to be robust.

“With UAE Jeep dealers launching the Off-Road Academy, Jeep enthusiasts will be able to take full advantage of their vehicles’ capabilities and the opportunity to add accessories,” said Kenneth G. Merritt of Bushwacker Inc.

Driving off-road for recreation is extremely popular and growing in both markets, and hobbyists are good customers for products that enhance the functionality of these vehicles on unpaved roads.

Musclecars and Classics

In addition to the previously mentioned market for all products for off-road use, American classic cars and late-model musclecars have huge and loyal followings in the Middle East. There is brisk business in supplying products to meet consumer demand brought about by the Middle East’s ever-growing love affair with the car and motorsports.

Matchmaking Event

The UAE is a strategic gateway to the Middle East and will be the venue for an upcoming one-on-one matchmaking event that SEMA is hosting in the region on April 17–20. U.S. manufacturers will have the opportunity to meet with pre-vetted local importers and retailers in the UAE and from throughout the region through a series of private meetings and networking events. The U.S. government has partnered with SEMA to provide grants for qualified U.S. government officials to defray the cost of participating on this matchmaking program. To register, visit www.SEMA.org/middleeast. For more information, contact Linda Spencer at lindas@sema.org.