AMMAN — The Arab Investment and Export Credit Guarantee Corporation (Dhaman) announced that the automotive sector in Arab countries has attracted 184 foreign projects, with a cumulative investment exceeding $25 billion and creating over 102,000 jobs from 2003 to October 2024.
Dhaman explained, in its fourth sector report for 2024 issued on Sunday, that five Arab countries; Saudi Arabia, Morocco, UAE, Algeria, and Egypt accounted for 79 per cent of the total projects in the automotive sector. These projects represent an investment cost of more than $22 billion, with a share of 89 per cent of the total sectoral investment, and have created over 91,000 jobs, with a share of 89 per cent of the total.
The report focuses on four key aspects; the development and future of vehicle sales until 2028, foreign trade in vehicles and their components for 2023, in addition to foreign projects in the automotive sector, and assessing investment and business risks related to car sales activity in 2024.
China topped the list of investment exporters in the Arab region, implementing 27 projects in the region from 2003 to 2024, with an investment cost of nearly $8 billion and creating about 20,000 new jobs.
The report highlighted that the top 10 companies in the sector accounted for 41 per cent of the new projects, with a share of 67 per cent of total capital investments, and 58 per cent of the new jobs created.
Japan company’s Nissan topped in the number of projects reaching to 18 projects, with a share of 10 per cent of the total. However, the Chinese company Human Horizon Group topped in investment value, contributing $5.6 billion with a share of 22 per cent of the total. Meanwhile, the French company Renault topped in job creation, generating approximately 15,000 positions, with a share of 15 per cent of the total jobs created in the sector.
The report also ranked investment incentives and risks in 16 Arab countries based on Fitch ratings, with Gulf Cooperation Council (GCC) countries leading the list. The UAE ranked as the most attractive for automotive business and investment in 2024, followed by Saudi Arabia, Qatar, Kuwait, Oman, and Bahrain.
Vehicle sales in the Arab region, comprises of 16 countries, are expected to grow by over 5 per cent, exceeding 2.3 million units by the end of 2024, with a share of 2.4 per cent of global vehicle sales. This figure is expected to reach 3 million units by 2028.
Saudi Arabia, the UAE, Algeria, Morocco, and Kuwait collectively account for approximately 75 per cent of total regional sales.
Private car sales in 12 Arab countries are forecasted to exceed 1.8 million units by the end of 2024, marking a 4.5 per cent rise compared to 2023. Saudi Arabia leads this category with a 45 per cent share of the market. The region sales are expected to surpass 2.2 million vehicles by 2028, according to Fitch ratings.
The report indicated an increase in the regional vehicle fleet index, reaching an average of 307 vehicles per 1,000 inhabitants by the end of 2024, up by nine points. This figure is expected to further rise to 353 vehicles per 1,000 inhabitants by 2028, with Libya and many GCC countries exceeding the regional average.
Arab foreign trade in road vehicles and their components increased by 23 per cent in 2023, reaching $126 billion. This growth was driven by a 29 per cent rise in exports, totaling $29 billion, (bolstered by vehicle re-export activities valued at $14 billion in the GCC separately). Imports increased by 21 per cent, reaching $97 billion, with 82 per cent of the total trade concentrated in five countries: the UAE, Saudi Arabia, Morocco, Iraq, and Kuwait, collectively accounting for $103 billion.
Japan topped the largest exporter of vehicles and components to the Arab region, recording exports valued at $17 billion, representing 17 per cent of the total. Iraq emerged as the largest importer from the region, accounting for $10 billion 34 per cent of total imports.
Personnel transport vehicles topped Arab imports of vehicles and components in 2023, valued at $63 billion, exceeding 65 per cent of total imports. Vehicle parts and accessories followed, valued at $14 billion, contributing 14 per cent to total imports.
Dhaman, a joint Arab entity established in 1974 and headquartered in Kuwait, is owned by Arab countries and four financial institutions, with an A+ rating and a stable outlook from S&P. It is the world’s first multilateral investment insurance organisation.
