New tariffs announced by US President Donald Trump on cars and car parts imported into the US could lead to higher prices for vehicles in the UAE, according to industry experts. The tariffs, set to go into effect by May 3, 2024, could even impact car maintenance and repair costs in the region. However, some believe that the GCC markets, including the UAE, could benefit from redirected vehicle inventory, potentially offering lower prices or more choices for consumers.
Shah Bashrat, an automotive industry expert with over 30 years of experience, believes the tariffs will drive prices up worldwide. “Many top car manufacturers have plants in the US, and these tariffs will impact them,” he said. “This will likely result in price increases not just in the UAE but across the globe.”
The impact of these tariffs is already being discussed by other experts. Former Ford CEO Mark Fields stated that every vehicle would become more expensive as a result. For Ifthikar Aly, the founder of Kandy Cars, which imports American muscle cars into the UAE, price hikes are inevitable, though he expects them to take a few months to materialize. He added that US-manufactured vehicles using internationally sourced components, like Lexus, BMW, and Mercedes, could see price increases of 10-15%. 
Despite these concerns, Rahul Singh, Managing Director at Dollar and Thrifty UAE, sees potential for lower car prices in the UAE. “The UAE is likely to see stable or even lower prices,” he said. “While the tariffs disrupt global supply chains, manufacturers will need to redirect cars to new markets, such as the UAE. This could lead to a surplus of vehicles, creating opportunities for consumers.”
The UAE market could experience better availability and more competitive prices as manufacturers adjust their supply chains. However, Ifthikar warns that consumers may rush to buy vehicles soon, anticipating the price hikes.
Abhinav Gupta, CEO of CARS24 in the Gulf, also believes that the GCC auto sector will largely remain unaffected. However, he cautions that delays in spare parts and new car models from countries hit by the tariffs are possible. He adds that cars from Asia, especially China, could see increased market share due to their competitive pricing.
As the global automotive landscape adapts, the next few months will be key for the UAE and GCC markets, with potential for both disruptions and new opportunities.
