The auto parts market in the UAE presents a compelling landscape for savvy investors and entrepreneurs alike. With over 2.6 million registered vehicles and a remarkable ownership rate of more than 800 cars per 1,000 residents, the UAE has cultivated a vibrant automotive landscape. Recent projections estimate that the automotive aftermarket will soar to AED 18.1 billion by 2026, fueled by a robust compound annual growth rate (CAGR) of 7.4%. This dynamic growth can be attributed to the increasing consumer demand for high-quality aftermarket parts and a burgeoning interest in vehicle customisation, with 68% of car owners keen on modifications and enhancements.
Key drivers of this demand include the UAE’s diverse population, with a mix of expatriates and locals who prioritise vehicle maintenance to cope with the region’s harsh climate and road conditions. Furthermore, the expansion of e-commerce has transformed how consumers purchase auto parts, with online sales projected to account for 30% of the market by 2025. The rise of digital platforms, coupled with the proliferation of service centres offering everything from routine maintenance to advanced repairs, creates an exhilarating opportunity for those looking to enter this lucrative market. With such promising figures and a dynamic consumer base eager for innovative solutions, the auto parts industry in the UAE is a strategic move into a sector poised for remarkable growth.
Hence, if you’re looking to establish an auto parts store in the UAE, here are the various business activities you can select under your license:
4530.00 – Sale of Motor Vehicle Parts and Accessories
Sale of motor vehicle parts and accessories refers to the business activity primarily engaged in the retail and wholesale distribution of components, parts, and accessories specifically designed for motor vehicles. This includes a broad spectrum of items such as engines, transmissions, brake systems, electrical components, tires, and aftermarket accessories that enhance the vehicle’s functionality, safety, and aesthetic appeal.
Businesses operating under this classification typically serve both individual consumers and commercial clients, including automotive repair shops, dealerships, and fleet operators. This sector is characterised by its reliance on technical knowledge regarding various vehicle models and specifications, as well as an understanding of market trends that influence consumer preferences for both original equipment manufacturer (OEM) parts and aftermarket alternatives.
4530.01 – Wholesale and Retail Sale of All Kinds of Parts, Components, Supplies, Tools and Accessories for Motor Vehicles
This business activity encompasses the wholesale and retail distribution of a comprehensive range of parts, components, supplies, tools, and accessories specifically designed for motor vehicles. It includes, but is not limited to:
- Rubber Tires and Inner Tubes: The sale of various types of tires, including passenger, light truck, and specialty tires, as well as the associated inner tubes necessary for maintaining tire integrity and performance.
- Spark Plugs: The provision of spark plugs, which are critical components in internal combustion engines, responsible for igniting the air-fuel mixture within the engine cylinders, thus facilitating engine operation.
- Batteries: The distribution of automotive batteries that supply electrical energy to start the vehicle and power various electrical components, including lights, infotainment systems, and onboard electronics.
- Lighting Equipment: The sale of lighting solutions, including headlights, taillights, turn signals, and interior lighting, which are essential for vehicle safety and visibility.
- Electrical Parts: The provision of various electrical components such as alternators, starters, wiring harnesses, and fuses, which are vital for the electrical system’s functionality and the overall operation of the vehicle.
4530.02 – Trucks, Equipment and Machinery Batteries Trading
Trucks, equipment and machinery batteries trading refers to the business activity involving the wholesale and retail distribution of batteries specifically designed for use in trucks, heavy equipment, and machinery. This includes the sourcing, stocking, and sale of various battery types, such as lead-acid, lithium-ion, and absorbed glass mat (AGM) batteries, tailored to meet the power requirements of industrial vehicles and equipment.
Key components of this business activity include:
- Sourcing: Establishing relationships with manufacturers and suppliers to procure batteries that meet industry standards for performance, safety, and environmental compliance.
- Inventory Management: Maintaining a robust inventory of batteries to meet customer demand, ensuring a range of specifications in terms of voltage, capacity, and size to cater to diverse machinery and equipment needs.
- Sales and Distribution: Engaging in direct sales to end-users, as well as providing wholesale options to retailers or service centres. This may involve logistical considerations for the timely delivery of products to various commercial customers.
- Technical Support: Offering expert advice on battery selection, installation, maintenance, and recycling practices to ensure optimal performance and compliance with environmental regulations.
4530.03 – Cars Accessories Trading
This business activity refers to the business activity involving the wholesale and retail distribution of automotive accessories and components designed to enhance the functionality, performance, or aesthetics of motor vehicles. Essentially, it encompasses a broad range of products, including but not limited to:
- Interior Accessories: Items such as seat covers, floor mats, and steering wheel covers that improve comfort and style within the vehicle’s cabin.
- Exterior Accessories: Products including body kits, spoilers, and custom grilles that modify the vehicle’s external appearance and aerodynamics.
- Performance Enhancements: Components like exhaust systems, air intake systems, and suspension upgrades that improve the vehicle’s performance and handling characteristics.
- Safety Equipment: Accessories such as dash cams, blind-spot monitors, and parking sensors that enhance the safety of the vehicle and its occupants.
- Electronics and Technology: Products including infotainment systems, GPS units, and backup cameras that integrate technological features into vehicles.
4530.04 – Cars Additional Parts Trading
This business activity involves the wholesale and retail trading of supplementary automotive components specifically designed for motor vehicles. These additional parts include, but are not limited to, accessories, enhancements, and performance parts that are not considered original equipment manufacturer (OEM) parts. The trading encompasses both new and used car parts, covering a range of items such as:
- Aftermarket Accessories: Items that improve or customise vehicle functionality, aesthetics, or comfort, such as seat covers, floor mats, and infotainment systems.
- Performance Parts: Components designed to enhance the vehicle’s performance, including exhaust systems, suspension kits, and engine tuning devices.
- Replacement Parts: Non-OEM components used to replace worn-out or damaged parts, including brake pads, filters, and batteries.
4530.06 – Auto Spare Parts & Components Trading
This business activity encompasses the wholesale and retail trade of auto spare parts and components used in the repair and maintenance of motor vehicles. It includes a diverse range of products, such as engine parts, transmission components, electrical systems, braking systems, and other mechanical elements necessary for vehicle functionality.
4530.07 – Used Auto Spare Parts & Requisites Trading
Used auto spare parts & requisites trading refers to the business activity focused on the procurement, resale, and distribution of pre-owned automotive components and accessories. This includes various parts such as engines, transmissions, and electrical systems sourced from decommissioned vehicles. The activity involves sourcing from vehicle dismantlers and salvage yards, conducting quality assessments to ensure parts meet safety and reliability standards, and managing inventory for efficient sales. It serves both individual consumers and businesses, promoting sustainable practices in the automotive industry by facilitating the reuse of components and providing cost-effective alternatives to new parts.
Exclusions directly related to the business activities 4530.00, 4530.01, 4530.02, 4530.03, 4530.04, 4530.06 and 4530.07 include the retail sale of automotive fuel. This exclusion is distinct from the services provided within these activities.
- Third-party Approval: No third-party approvals are required for the business activities 4530.00, 4530.01, 4530.02, 4530.03, 4530.04, 4530.06 and 4530.07.
- Filing of Economic Substance Return: Business activities 4530.00, 4530.01, 4530.02, 4530.03, 4530.04, 4530.06 and 4530.07 are exempt from this requirement.
- Anti-Money Laundering Compliance: Business activities 4530.00, 4530.01, 4530.02, 4530.03, 4530.04, 4530.06 and 4530.07 are exempt from this requirement.
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