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Oman – The Middle East’s New Automotive Hub

With the number of cars on GCC roads set to rise to 13.2 million by 2020, Oman is fast emerging as the region’s new automotive hub – benefitting from unrivalled access to international shipping routes, low production costs, world-class logistics and swift, unrestricted entry to local and global markets.

Outside of the GCC, Oman’s location is supported by its closeness to production centers like India, as well as the opportunity to sell into key, growing markets in Africa. Furthermore, the Sultanate’s logistics infrastructure ensures increasingly shortened lead-times from source markets like USA, Europe and China to access raw materials for production.

Most recently, Oman’s Duqm port signed a USD 84 million deal with China’s Wuhan Xiao Long Automotive Technologies to build a manufacturing plant capable of producing 10,000 units a year. Planned foreign investment into the Duqm Special Economic Zone as a whole – one of the largest economic projects in the region – totals some USD 10.7 billion.

TVS Group (one of India’s largest industrial conglomerates) Brakes of India subsidiary has had a foundry operation in Salalah since 2011. The Dunes of Oman Joint Venture with Sundaram Finance Limited has two DISAMATIC high pressure moulding lines with a total capacity of more than 160,000 tonnes of castings each year – all exported to Europe and also North America – with whom Oman has one of the GCC’s only free trade agreements.

Alongside the opportunities across the GCC and beyond, there are a number of developments accelerating Oman’s domestic automotive market growth - which is expected to expand at a rate of 5 per cent CAGR to USD 4.23 billion by 2023. These include the 250,000 square meter Sandan Industrial Park – which will host the country’s largest automotive shopping mall and an automotive market in the new 51.6 million square meter Khazaen Economic City.

The automotive sector is a priority for Oman’s government, whose state-owned investment fund acquired Italian parts supplier Sigit in 2015. The company, which supplies manufactures including Fiat Chrysler, General Motors, Volkswagen and Renault, is expected to open a manufacturing plant incountry in the early 2020s.

As the young population in the GCC continues to increase vehicle consumption, Oman’s unique regional bilateral relations offer high-potential opportunities – making it the ideal entry point for panGCC sales – not only in terms of new vehicles, but also sales in auto parts and accessories – given the country’s unrestricted distribution network across the Middle East and its rapidly expanding manufacturing base.

When the automotive expertise and investment flowing into Oman is combined with the most competitive business investment incentives in the GCC and its prime geographical location, it is not hard to see why the country is becoming the location of choice for sector investors seeking to diversify from Europe’s saturated market. 

Key Facts:

• The number of cars on GCC roads set to rise to 13.2 million by 2020.

• Oman’s Duqm port recently signed a USD 84 million deal with China’s Wuhan Xiao Long Automotive Technologies to build a manufacturing plant capable of producing 10,000 units a year.

• Planned foreign investment into the Duqm Special Economic Zone as a whole – one of the largest economic projects in the region – totals some USD 10.7 billion.

• The Dunes of Oman Joint Venture with Sundram Finance Limited has two DISAMATIC high pressure moulding lines with a total capacity of more than 160,000 tonnes of castings each year – all exported to Europe and North America.

• Oman’s domestic automotive market growth is expected to expand at a rate of 5 per cent CAGR to USD 4.23 billion by 2023.
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