H. Yoo
Research expert covering South Korea
Automotive industry in the MENA region - statistics & facts
Despite a sharp decline in global vehicle sales in 2020 due to the COVID-19 pandemic, the automotive industry, including the Middle East and North Africa (MENA) region, is on a recovery path, though it faces ongoing economic pressures. High inflation and rising raw material costs in 2022 and 2023 have strained manufacturers and weakened consumer purchasing power. Still, the market is regaining momentum, with over 95 million in 2024. Global motor vehicle production is expected to reach nearly 100 million units by 2025, about 70 percent of which were passenger cars. Toyota, with more than 10 percent market share, is the , followed by Volkswagen.
In terms of automotive production, Turkey and Iran dominate the region, focusing primarily on passenger cars and light commercial vehicles. However, MENA’s automotive market faces challenges beyond regional dynamics. The global shortage of semiconductors in 2021 and 2022 severely impacted vehicle production, leading to price increases and delays in getting vehicles to market. Coupled with economic fluctuations, geopolitical tensions, and oil price volatility, these factors create additional pressure on consumer spending and market performance in the region.
On the luxury front, the United Arab Emirates (UAE) is carving out a niche market for high-end and sports vehicles, with luxury car sales forecasted to exceed 4,500 units by 2026. In addition, the UAE is aiming to establish itself as a hub for the production of luxury sports cars, reflecting its ambition to diversify its economy beyond oil and into high-end automotive manufacturing.
The MENA automotive industry holds strong potential for growth in both sales and production. Despite economic and political challenges, further investment in EV infrastructure and local production could drive expansion. The region’s outlook remains cautiously optimistic, with a solid foundation for future development amid global market shifts.
Automotive industry in the MENA region
As one of the world's emerging markets, the MENA region has become a focal point for global automotive manufacturers seeking to capitalize on the increasing demand for vehicles. During 2024, Saudi Arabia led the region in terms of passenger car sales ²¹²Ô»å commercial car sales. With a burgeoning population, rising income levels, and urbanization on the upswing, the demand for automobiles has surged across the region. International giants such as Toyota, Ford, Nissan, and Volkswagen have established a substantial presence, competing with local manufacturers.In terms of automotive production, Turkey and Iran dominate the region, focusing primarily on passenger cars and light commercial vehicles. However, MENA’s automotive market faces challenges beyond regional dynamics. The global shortage of semiconductors in 2021 and 2022 severely impacted vehicle production, leading to price increases and delays in getting vehicles to market. Coupled with economic fluctuations, geopolitical tensions, and oil price volatility, these factors create additional pressure on consumer spending and market performance in the region.
The push for electrification and luxury cars
As global trends shift toward electrification, the MENA region is also embracing electric vehicles (EVs). Governments are implementing policies to boost EV adoption, with EV sales in the greater MEA region expected to reach 45,000 units by 2026. While Tesla remains a key player, more affordable EVs from Chinese brands are expanding consumer options. In 2024, BYD became the most recognized Chinese EV brand in Saudi Arabia.On the luxury front, the United Arab Emirates (UAE) is carving out a niche market for high-end and sports vehicles, with luxury car sales forecasted to exceed 4,500 units by 2026. In addition, the UAE is aiming to establish itself as a hub for the production of luxury sports cars, reflecting its ambition to diversify its economy beyond oil and into high-end automotive manufacturing.
The MENA automotive industry holds strong potential for growth in both sales and production. Despite economic and political challenges, further investment in EV infrastructure and local production could drive expansion. The region’s outlook remains cautiously optimistic, with a solid foundation for future development amid global market shifts.
