Growing numbers of automotive aftermarket companies are choosing to establish manufacturing facilities in the GCC, according to Messe Frankfurt, organisers of Automechanika Dubai.
The event organiser cites three parts manufacturers that have invested in UAE parts manufacturing facilities during 2015.
In February 2015, German manufacturer Cardan Service Network (CSN), made a multimillion-dirham investment in a shaft manufacturing plant in Dubai. The facility produces parts for European trucks, light commercial vehicles, and construction machinery operating across the Middle East and North Africa (MENA) region.
Commenting on the purpose of the plant, Hans Brune, managing partner at CSN, said: “Previously, workshops were forced to arrange temporary repair solutions until a new replacement part of the correct size is made available from abroad. Or, they would rely on second-hand parts to keep vehicles and equipment running, which runs the risk of repeat breakdowns.
“Now, we have in the UAE a factory that can design, develop, manufacture, and exchange Cardan shafts for four different segments, with the quick turnaround enabling customers to reduce downtimes and better monetise their businesses,” he explained.
In March 2015, Advanced Manufacturing Solutions penned a deal with Abu Dhabi’s Khalifa Port Industrial Zone (Kizad) for the establishment of a steel factory that will produce automotive spare parts. The facility will boast a 300,000-tonne-per-annum capacity, and will manufacture components such as brake callipers and brake discs for the global automotive industry.
Earlier this month, in partnership with Albelad Auto Parts Trading, Canada-headquartered Ecobrex opened a 6,500m2 warehouse distribution centre in Dubai to supply components across the MENA region. The $15m (AED55.1m) facility has an outbound capacity of five-to-eight containers per day. Ecobrex predicts that the warehouse’s annual turnover will be in the region of $50m (AED183.7m).
The manufacturer’s general manager, Babak Ras, said: “Ecobrex has already established a solid foothold in the MENA region, but in the past, we faced some challenges in terms of delivery. With this new facility, Ecobrex will substantially increase its capacity to meet regional demand. For us, the biggest and the most important markets are Saudi Arabia and Egypt, but we also serve the UAE, Kuwait, Jordan, Bahrain, Qatar, Oman, and Algeria in good quantities.”
Auto spare parts demand in the MENA region is expected to hit $16.85bn (AED61.9bn) by 2020, according to analysts Frost & Sullivan. If accurate, this figure will be almost double that of the $9.5bn (AED34.89bn) market value achieved in 2013.
Ahmed Pauwels, CEO of Messe Frankfurt, commented: “The Middle East automotive aftermarket is clearly undergoing rapid growth, and industry majors are tapping into new opportunities by investing heavily in the region with a more robust physical presence.”
Automechanika Dubai 2015 will take place from 2-4 June at Dubai World Trade Centre.
