Chinese car sales soar in UAE as motorists favour lower cost and more features

The popularity of Chinese cars in the UAE has risen sharply in recent months, with one manufacturer registering record sales figures in the first three months of the year.

Car portal Yalla Motor said Chinese-owned MG was the fourth highest-selling brand in the UAE from January to March, behind Japanese giants Toyota and Nissan and South Korean manufacturer Hyundai. MG's year-on-year sales registered an increase of almost 86 per cent.

Car company Geely, distributed in the UAE by AGMC, sold more than 1,000 vehicles in the six weeks since it opened its Dubai showroom in May.

Geely AGMC has opened a second showroom in Sharjah to cater to demand in Dubai and the Northern Emirates and has plans to open a third in Abu Dhabi this year.

Popular with residents

Locally, motorists said they favour the value for money and extra features they get with Chinese manufacturers such as Geely, BYD and GAC.

One Dubai resident said how he sold his BMW X5 for a GAC Trumpchi this year.

“I was always an SUV guy so it was important I wasn’t losing out on quality,” said Sultan Qazi, a director with an oil and gas company.

“The critical factor was that it is cost-effective, without compromising on the features available. The difference between what I was paying for my old car compared to what I get for this is amazing.”

Mr Qazi pays about Dh2,000 ($544) a month to lease his car, having previously owned his last vehicle.

He estimated he saved about Dh500 each month on fuel, despite having a similar-sized engine and driving the same distances as before.

“I leased it because I wanted to test the water but as soon as the lease is up I will definitely buy one of my own,” said the 57-year-old from India.

“I used to always buy BMW as my thinking was nobody could make better cars than the Germans. That’s not the case anymore.”

China produced more than 26 million cars in 2021, according to the most recent data available from the International Organisation of Motor Vehicle Manufacturers.

The closest competitor was the US, which produced 9.17 million cars during the same period.

China also exported more than a million cars in the first quarter of the year, according to the country’s Association of Automobile Manufacturers.

This meant it had toppled Japan from its position as the world’s biggest exporter of cars.

More affordable

“Cost was the major factor behind my decision,” said Shumaila Shehzadi, a 32-year-old data analyst from Pakistan, who has just bought her first car – an Atto 3 from electric vehicle (EV) manufacturer BYD.

“It’s the first car of any kind that I’ve bought myself and it was much more affordable than other cars I considered.

“Buying an electric vehicle had been a long-term goal but it was only now that I felt I could get the right value for money.”

A new Atto 3 SUV is in the region of Dh150,000. Buying a new Mercedes EQE SUV would cost in the region of Dh290,000.

There has been a noticeable increase in sales of Chinese cars in the UAE, with cost being the dominant factor, said a senior figure from classified sales portal Dubizzle.

“The cost of living has certainly influenced customers when it comes to buying cars, including Chinese vehicles,” said Christopher Milbourne, social media and content manager with the company.

“In these challenging times, people are looking for ways to save money.”

He said a number of brands had gained significant traction in the UAE in recent months.

“Brands such as MG, Changan, Jetour, JAC, GAC, Geely and others have flourished in the market due to their budget-friendly prices and offerings both inside the car and out,” said Mr Milbourne.

“Chinese manufacturers have managed to provide more affordable alternatives, making their vehicles appealing to cost-conscious customers.”

Electric dreams

While demand for EVs is increasing all the time, the majority of cars being sold are still those which run on petrol and diesel.

The Chinese market here is no different, Mr Milbourne explained.

“Electric cars in the UAE are still a relatively small part of the market and Chinese manufacturers are introducing both electric and combustion engine options,” he said.

Dubai resident Sunil Makhija explained how a particular model of Chinese EV was his dream car.

“What tipped the scales for me was I didn’t want to buy just any old brand,” said Mr Makhija, an Indian estate agent.

“I ordered an Atto 3 and paid around Dh150,000 for it.

“It was a much more affordable price to others that I had seen in the market and because Warren Buffett had invested in BYD, it was a brand I was waiting for to come to the UAE.”

Shifting perceptions

Chinese cars are popular because of how much value they offer compared to cars from other markets, said an expert.

“The car you get for your money is significantly better than what you get from the non-Chinese market,” said Adam Whitnall, chief executive of car comparison website Drive Ninja.

“You’re probably getting 30 to 40 per cent more features on the Chinese cars that you are buying.”

There is still a reluctance among many motorists that buying a car made in China comes with risks, but those numbers are dwindling, he added.

“It really depends on the consumer and some won’t go near anything they are unfamiliar with,” said Mr Whitnall.

“There’s also uncertainty about what the resale value might be. A lot of the [Chinese] brands were around here for years, but in low volumes, now you are seeing much more of them on UAE roads, this gives other people the confidence to go out and buy them.”

Al-Futtaim Automotive is another UAE dealer to expand its showroom space to cater to rising demand. It opened up a new dealership in City Walk, Dubai, to showcase the BYD range, which has just been introduced into the country.

“The cost of living is in many people’s minds right now as they try to keep costs down,” said Hasan Nergiz, managing director at Al-Futtaim Electric Mobility Company.

“That makes people more sensitive about what they are spending each month on their car.”

Research conducted by his company suggested attitudes to Chinese cars were changing, he added.

“It might have been the case Chinese cars were seen as cheaper knock-offs about 10 years ago, but that is not the case anymore," said Mr Nergiz.

“People are associating Chinese products with the best in advanced technology. You only have to look at the inroads Huawei has made in its sector against the likes of Apple.”