Used Car Export Country Guide Asia - UAE
创建于2024.08.19
1. Basic Information
The United Arab Emirates (UAE) is located in the eastern part of the Arabian Peninsula. Its capital is Abu Dhabi. Its land area is 83,600 square kilometers and its population is 9.517 million. According to data from the International Monetary Fund, the UAE's GDP in 2023 was US$509.2 billion, a year-on-year increase of 3.4%, and its per capita GDP was US$53,500. The UAE is the world's third largest entrepot trade center and a trade hub in West Asia and North Africa. China is the UAE's largest trading partner, and the UAE is China's largest non-oil trading partner in the Middle East and North Africa. According to Chinese customs data, the bilateral trade volume between China and the UAE reached US$94.98 billion in 2023, a year-on-year decrease of 4.3%, of which China's exports to the UAE reached US$55.69 billion, a year-on-year increase of 22.6%, and China's imports from the UAE were US$39.29 billion, a year-on-year decrease of 27%. The UAE is one of the Middle Eastern countries with the deepest cooperation with China, the broadest fields, and the most substantial results. It is an important logistics hub connecting China with West Asia and North Africa. In March 2023, the UAE lifted the nucleic acid test requirements for Chinese tourists to enter the country and fully implemented a visa-free policy. In November 2023, the governors of the central banks of China and Algeria met and renewed the bilateral currency swap agreement, reaching a five-year cooperative partnership with a scale of RMB 35 billion.
The UAE is rich in oil and natural gas resources. The proven oil reserves are about 15 billion tons and the natural gas reserves are 7.7 trillion cubic meters, both ranking sixth in the world. The UAE has a well-developed transportation industry, and the emirates are connected by modern highways. The total length of the UAE highways is about 4,080 kilometers, and the road quality ranks among the best in the world.
In 2022, the UAE was the tenth largest automobile exporter to my country.
2. Automobile Market Situation
Since 2021, the UAE automobile market has recovered rapidly. In 2022, the UAE sold 224,000 vehicles, a year-on-year increase of 13.0%. In the first half of 2023, automobile sales reached 134,000, an increase of 23.0% over the same period in 2021. The automobile market is growing rapidly. With the increase in trade between China and the UAE and the gradual improvement of China's automobile product strength and brand strength, the recognition and market share of Chinese brand vehicles in the UAE have gradually increased. A large number of Chinese vehicles have been exported to the UAE. In 2022, the UAE became my country's tenth largest automobile export destination. In addition to exporting cars to the UAE, many Chinese automobile companies have further expanded the UAE automobile market by establishing automobile factories in the UAE.
In terms of new energy vehicles, the UAE will increase the layout of the new energy vehicle market and promote the development of the new energy vehicle industry as the focus of the transformation and upgrading of the UAE's automobile industry. The UAE approved the "National Electric Vehicle Policy", which proposed a series of measures including providing financial incentives for the purchase of electric vehicles, investing in the development of a national electric vehicle charging station network, exempting some taxes and fees for electric vehicles, and regulating the electric vehicle market. As of March 2023, nearly one-fifth of government agencies in the UAE have replaced official vehicles with electric vehicles. The UAE government stated that by 2050, the proportion of electric vehicles will exceed 50%. In July 2023, the UAE government issued a national electric vehicle policy to accelerate the popularization of electric vehicles and hybrid vehicles, promote the establishment of a world-class electric vehicle infrastructure, and formulate legislation and technical frameworks for the local recycling of electric vehicle power batteries. In December 2023, the UAE government began to implement the EVIQ plan, planning to launch 5,000 electric vehicle charging stations by 2030. According to data from the Dubai Electricity and Water Authority, as of December 2023, the number of electric vehicles in Dubai has reached 25,929, an increase of about 71.7% year-on-year.
In terms of used cars, the UAE, relying on its second largest city Dubai, has become an important international used car transaction transit center, with developed used car transactions and re-export trade. In terms of used car trade, Dubai has obvious location advantages, convenient trade policies, and abundant sea and land transportation routes. It is a distribution center for used car trade in the Middle East, Central Asia, Eastern Europe and Africa. A large number of used cars gather in Dubai for display, sales and transit. At the same time, the policy of unlimited time for bonded warehousing in Dubai Free Trade Zone and no re-export fees has also accelerated the gathering of vehicles in Dubai. At present, most of the used cars exported from China to the UAE are re-export trade cars, and the main target markets are the Middle East, Eastern Europe and Africa, such as Jordan. Relying on Dubai's location advantages, when the vehicles are pre-positioned in Dubai's overseas warehouses, they can face customers in multiple countries and regions, with high fault tolerance. Overseas customers can also see the current cars and complete transactions and transportation more conveniently and quickly.
In terms of local transactions of used cars, due to the insufficient supply of new cars and the rapid increase in population, the demand for used cars among local residents in the UAE, especially young consumers, has surged. At the same time, the large number of used car businesses gathered in Dubai has provided local consumers with a wealth of market choices and promoted the development of local used car circulation in the UAE. In addition, the growing foreign population and the convenience of online sales technology have further promoted the sales of local used cars. However, according to algodriven, due to the increase in immigration and the entry of new players in the used car trade, the overall price of used cars in the UAE will drop by about 15% in 2023. It is expected to stabilize as the population increases.
(III) Policies and regulations on the import of used cars
1. Import policy
Used cars imported into the UAE must not be more than 10 years old. If they are older than 10 years, special permission from the relevant authorities (such as Dubai Roads and Transport Authority RTA) is required. Both left-hand and right-hand drive vehicles can be imported. Right-hand drive vehicles cannot be registered and cannot be driven on the road, but they can be re-exported. Upon arrival in the UAE, all vehicles must be inspected/assessed by the UAE Customs. The following vehicles are prohibited from importation:
• Vehicles that were once used as taxis or police cars
• Vehicles with tinted windows (otherwise fines will be imposed and required to replace compliant windows)
•Scrapped cars
• Accident car, passing train, flooded car
2. Tax policy
Used cars imported into the UAE are subject to a 5% tariff and a certain percentage of VAT. After inspecting the vehicle, the customs will verify whether the export declaration value is correct. If it is inconsistent, the difference needs to be paid. For re-exported used cars, tariffs are exempted. In 2019, in order to further reduce the operating costs of trading companies, promote cross-border trade, and improve the convenience of doing business in Abu Dhabi (Port), the Abu Dhabi Executive Committee decided to cancel the 1% fee of the value of the goods when returning the deposit for temporary imported goods, and instead charge a unified re-export fee of 50 dirhams.
3. Documents required for import
• Original bill of lading: including make, model, VIN number, engine number, color and type of car, etc.
• Export Certificate (Document of Title)
• Purchase/commercial invoice
• Copy of passport
• Copy of UAE Residence Permit or Visa page (signed in passport)
• Authorization letter (which the customer will get once the vehicle arrives in Dubai)
• The name on the vehicle title should be the same as the name on the visa
• Vehicle condition report provided at the loading port
• Insurance policy
(IV) Characteristics of Dubai’s used car export business
1. Industrial Agglomeration
As an important international second-hand car trade transit center, Dubai has two second-hand car trade clusters, Jebel Ali Free Zone and Dubai Auto City (DUCAMZ). Jebel Ali Free Zone is located closer to the port and has a vast area. Therefore, Jebel Ali Free Zone has become a storage cluster for Dubai's second-hand car trade, and a large number of vehicles are bonded in this free zone. Large Chinese companies such as Sinotrans and China National Building Materials have built large comprehensive bonded warehouses in Jebel Ali Free Zone, which can provide relevant services for second-hand car trade. Dubai Auto City (DUCAMZ) has a relatively small area, but this area is mainly used for display and trading. Merchants from neighboring countries and regions usually purchase and trade in Dubai Auto City. Therefore, a good free trade zone interaction has been formed between Dubai Auto City and Jebel Ali Free Zone, that is, vehicles are stored in Jebel Ali and displayed and sold in Dubai Auto City.
2. Dubai Motor City (DUCAMZ)
In order to export used cars to the UAE, the Middle East, Asia and Africa, Dubai established DUCAMZ, which is located in the Ras AI Khor area of Dubai, covering an area of about 720,000 square meters. It is a bonded area specifically for automobile trade. The park is divided into four areas: A, B, C, and D, with 396 showrooms, 16 warehouses, 11 office areas, and 7 work areas. In recent years, about 130,000 to 140,000 vehicles are imported into the DUCAMZ park each year, of which about 80% are left-hand drive vehicles and 20% are right-hand drive vehicles. In 2022, the proportion of Chinese vehicles entering DUCAMZ reached 30%, but after the ID ban was issued, the number of Chinese-made vehicles entering DUCAMZ has dropped to 6-7%. Vehicles in the DUCAMZ park are subject to local customs supervision, and vehicles must obtain permission from the customs department before they can enter and exit. Left-hand drive vehicles in the DUCAMZ park are generally sold by direct sales or channel wholesale sales, and the auction of left-hand drive vehicles is not allowed locally. The direct sales model is for consumers or car dealers to go directly to the DUCAMZ park to make on-site purchases. The channel wholesale sales model is based on the various mature channel resources accumulated by dealers in DUCANZ over a long period of time. After obtaining the source of vehicles, the vehicle list is sent through telephone or email, etc., and the relevant vehicles are sold in batches. At present, the DUCAMZ operator is also planning to establish an online platform for vehicle transactions to further facilitate vehicle transactions in the park.
Since there are relatively few right-hand drive vehicles in the park and the demand is relatively scattered, in order to improve the convenience of right-hand drive countries to purchase vehicles and gather relevant groups and resources, right-hand drive vehicles in DUCAMZ Park are usually sold by auction, mostly by single-vehicle auction. There are a total of 8 companies in the park that auction right-hand drive vehicles, which are basically all Japanese cars. Most of the related vehicles are in poor condition, and the vehicle prices are generally in the range of several thousand dirhams. The customers are basically from Africa. The vehicles to be auctioned are usually displayed one day in advance and marked with the auction number. At the same time, the vehicle history information will be marked or pasted on the front windshield for customers to evaluate the vehicle condition and value in advance.
Source: China Used Car Export Country Guide 2023
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