Attitudes on car ownership in the UAE shift because of Covid-19

Cars offer a 'socially distanced transport bubble', regional head of transport consultancy says

FILE PHOTO: FILE PHOTO: Tesla Model X electric cars recharge their batteries in Berlin, Germany, November 13, 2019.    REUTERS/Fabrizio Bensch/File Photo

Some 43 per cent of UAE residents think owning a car is now more important than it was before the Covid-19 pandemic, against a global average of 48 per cent, according to a new survey.

Coronavirus-induced disruptions have led to a change in consumers' mindset, with many UAE consumers "valuing car ownership more highly since the onset of the crisis", according to the Future of Automobility report by Boston-based consultancy Arthur D Little. It found that 34 per cent of UAE users placed the same amount of importance on owning a car as before the pandemic, while about 24 per cent felt owning a vehicle was less important.

UAE consumers cited the need for a sense of security as one of the main reasons why they viewed car ownership as more important, Joseph Salem, transportation regional practice leader at Arthur D Little, said.

“Since the Covid-19 outbreak, cars have played an even bigger part in people’s lives because of the protection and independence they offer," Mr Salem said.

“The protection we feel inside our socially distanced transport bubble, as opposed to using public transport, seems to be preying on the mind of the consumer more than ever before.”

The report, which surveyed 8,500 customers in 13 countries, forecast annual sales of passenger cars will hover between 97 million and 103 million globally by 2030. This represents an annual growth rate of 2 per cent but a “significant drop” compared with the consultancy’s last forecast two years ago.

Respondents increasingly see electric vehicles as commonplace and are less willing to pay a premium for them as a result.

Only a quarter of those polled said they would be willing to pay more for battery vehicles and first-time EV owners are “highly likely” to stick with them when choosing their next vehicle.

China, the world’s biggest car market, is leading the industry when it comes to adopting autonomous driving technology. More than 70 per cent of Chinese customers said they are positive about it, compared to just 28 per cent in Europe and 26 per cent in the US.

Despite Covid-related restrictions, nearly 55 per cent of individuals said they would prefer at least one personal or face-to-face consultation with a traditional dealer before buying a car.

The UAE ranked highest of all surveyed countries in relation to visiting car dealerships before buying a car. In total, 11 per cent of buyers visited a dealer once, while 27 per cent visited twice or three times.

“When it comes to arranging test drives and finalising purchases, more than two-thirds of UAE respondents prefer person-to-person interaction … these aspects seem likely to remain in place regardless of a global pandemic,” Mr Salem said.

Globally, there is a growing acceptance of other retail methods, though, with 71 per cent of Chinese customers saying they would be willing to buy a car online, compared to 42 per cent in the US and 35 per cent in Europe.

EDITOR'S PICKS
NEWSLETTERS