The UAE luxury car market attained a value of USD 4.70 Billion in 2025 and is projected to expand at a CAGR of around 5.60% through 2035. A key factor propelling growth of the UAE luxury car market is the country's multicultural customer base, which revolves around unique consumer tastes and expectations. Luxury automobile dealerships address this diversity by stocking a multitude of brands and models, guaranteeing they meet the unique requirements of their customers. This encompasses focusing more on comfort, high-tech features, sportiness, and power to cater to different cultural preferences and lifestyle options. These customized products strengthen the appeal of luxury car ownership in the cosmopolitan UAE ecosystem, thereby pushing the industry to attain a value of USD 8.10 Billion by 2035.
Another distinctive factor propelling growth in the UAE market for luxury cars is the growth in billionaire fortunes, which expanded by 39.5% in 2024 to USD 138.7 billion, in combination with the arrival of more than 6,700 new millionaires. This growth of high-net-worth individuals drives demand for high-end cars such as Rolls-Royce, Bentley, and Lamborghini, usually customized to represent personal status. Favourable tax policies and low import tariffs further enhance the appeal of luxury automobile ownership, cementing the UAE's position as a top destination for high-end car purchases.
The UAE luxury car market is changing at a fast pace with innovations aimed at electric and autonomous cars. Automakers are launching advanced electric vehicles with longer ranges and quicker charging times, thus augmenting the UAE luxury car market expansion. Autonomous driving technology is gaining traction, with brands incorporating AI-driven safety features. Connectivity via smart infotainment and over-the-air updates improves user experience. Customization choices are growing as consumers demand personalized cars. Government efforts, such as installing 1,200 EV charging points by 2025, aid market expansion. These trends reflect the UAE's dedication to smart mobility and green technology and its positioning as a Middle East luxury electric vehicle innovation hub.
Base Year
Historical Period
Forecast Period
Compound Annual Growth Rate
5.6%
Value in USD Billion
2026-2035
*this image is indicative*
| UAE Luxury Car Market Report Summary |
Description |
Value |
|
Base Year |
USD Billion |
2025 |
|
Historical Period |
USD Billion |
2019-2025 |
|
Forecast Period |
USD Billion |
2026-2035 |
|
Market Size 2025 |
USD Billion |
4.70 |
|
Market Size 2035 |
USD Billion |
8.10 |
|
CAGR 2019-2025 |
Percentage |
XX% |
|
CAGR 2026-2035 |
Percentage |
5.60% |
|
CAGR 2026-2035- Market by Region |
Dubai |
6.4% |
|
CAGR 2026-2035 - Market by Type |
Sports Utility Vehicles (SUVs) |
6.7% |
|
CAGR 2026-2035 - Market by Drive Type |
Electric and Hybrid |
7.4% |
The luxury cars in the UAE is embracing electrification at a faster pace, prompted by the demand for performance, environmentally friendly vehicles. Premium brands like NIO have launched sophisticated battery-swapping technology with the capability to replace 100 kWh batteries quickly, increasing range by up to 510 km. Tesla and others concentrate on rapid charging and AI-driven energy management systems to maximize battery life and efficiency. This transition complies with UAE's vision for sustainability and government backing for EV facilities, urging prosperous purchasers to embrace electric luxury vehicles without deterring power or convenience, thus promoting the UAE luxury car market development.
Luxury car manufacturers are incorporating the latest AI features and autonomous driving capabilities into their vehicles to enhance safety, comfort, and convenience. NIO's EL8 SUV, unveiled in the UAE, has NOMI AI assistant, LiDAR sensors, and 360° cameras, which improve situational awareness and semi-autonomous driving. These intelligent systems forecast traffic flow and aid in directions, targeting tech-minded buyers in pursuit of futuristic driving. Autonomous functions also minimize accident risks and offer bespoke in-car experiences, thus standing as a core selling proposition for the competitive UAE luxury car market.
Customization is a key driving factor in the UAE luxury automobile market, where high-end consumers want distinctive cars that mirror individual tastes and status. Brands such as Dourado and Brabus provide custom designs with rare materials like forged carbon, hand-stitched leather, and individual color schemes like Nardo Grey and Olive Green Metallic. Low-production runs, performance tuning, and customized interiors build exclusivity. Workshops and in-person events enable customers to co-create their cars, creating a foundation for loyalty to the brand. The tactic takes advantage of the UAE's desire for uniqueness and luxury differentiation, thus shaping new trends in the UAE luxury car market.
Sustainability is prompting luxury car manufacturers in the UAE to employ environmentally friendly materials and sustainable manufacturing techniques. Businesses increasingly employ recycled and renewable materials such as forged carbon fibre and biodegradable packaging for car accessories. These technologies minimize environmental footprint and appeal to regionally based environmentally aware consumers. The direction reflects UAE government strategies encouraging green technologies and environmental stewardship, enhancing luxury brands' leadership as custodians of sustainable innovation with the delivery of ethically made premium vehicles according to market demands.
As a form of diversification, luxury car manufacturers such as Brabus have entered the UAE real estate market through the introduction of branded residences. The developments combine automotive design ideology with high-end living areas, providing residents with unique lifestyle experiences based on luxury cars. This move advances brand experience beyond automobiles, enticing high-end consumers in pursuit of comprehensive luxury lifestyles. By building engaging environments that merge design, performance, and exclusivity, manufacturers are reshaping brand value and generating new revenue streams within the luxury car market in the UAE.
The EMR’s report titled “UAE Luxury Car Market Report and Forecast 2026-2035” offers a detailed analysis of the market based on the following segments:
Market Breakup by Type
Key Insight: SUVs lead the market because of their multi-purpose design, striking a balance between spacious interiors and off-road capability, thus boosting the UAE luxury car demand growth. Growing urbanization, rising family sizes, and demand for cars providing greater ground clearance and safety equipment drive up SUV sales. Further, improvement in fuel efficiency and the availability of hybrid models appeal to environmentally friendly consumers. SUVs are the most sought-after car type during 2025 in South Korea because they are used for daily city trips and weekend excursions alike.
Market Breakup by Drive Type
Key Insight: Electric and hybrid cars are becoming the dominant kind of drive types, fueled by UAE’s ambitious government policies for clean energy and carbon reduction. Increasing fuel prices and consumer demand for sustainable mobility also drive adoption, thereby propelling the UAE luxury car market development. Improved battery technology and increased charging infrastructure further drive market penetration, with electric and hybrid cars being the choice of environmentally conscious consumers and fleet operators in 2025.
Market Breakup by Region
Key Insight: Dubai leads the regional market due to its status as a commercial hub with high disposable incomes and demand for luxury and innovative vehicles. The city’s infrastructure supports a growing automotive sector with advanced dealerships and service networks. Dubai’s focus on smart city initiatives and sustainability encourages adoption of electric and hybrid vehicles, driving strong growth in the automotive market through 2025.
SUVs lead market with strong urban and premium demand.
SUVs are both the fastest-expanding and biggest vehicle segment, driven by demand for practical, technology-enabled vehicles. Their popularity stems from mixing convenience, roominess, and sophisticated safety technology, buttressed by government subsidies for environmentally friendly SUVs. In March 2025, Dubai’s Roads and Transport Authority announced increased incentives for electric SUVs, including reduced registration fees and free parking, boosting demand for eco-friendly luxury SUVs. This policy aims to accelerate the shift toward sustainable urban mobility in the UAE. Hatchbacks come next as the quickest growth segment in urban markets due to affordability and efficiency. SUVs are anticipated to hold a significant market share in total vehicle sales by 2025 owing to lifestyle and infrastructure dynamics, thereby bolstering the UAE luxury car market revenues.
|
CAGR 2026-2035 - Market by |
Type |
| Sports Utility Vehicles (SUVs) |
6.7% |
| Sedans |
6.2% |
| Multi-Purpose Vehicles (MPVs) |
XX% |
| Hatchbacks |
XX% |
| Others |
XX% |
Electric and hybrid cars dominate, showing fastest market growth.
Electric and hybrid cars are the most rapidly expanding segment because of rapidly advancing technological progress, government support, and heightened ecological consciousness. In January 2025, UAE’s DEWA announced plans to increase Green Charging Stations from 370 to 1,000 by 2025. Coupled with government incentives like reduced fees and free parking, this is driving rapid growth in electric and hybrid vehicle adoption. Growth in this segment is faster than that of conventional ICE cars, which, though they command a huge market share, are losing ground continuously. Electric and hybrid cars are expected to account for more than half of the new car sales in UAE by 2025, a significant transformation towards eco-friendly transportation. ICE cars are still important but will decline slowly with tighter emission regulations.
Dubai is the fastest-growing and largest region, whereas Abu Dhabi grows steadily
Rapid urbanization, sustained tourism and government initiatives to facilitate smart mobility have made Dubai both the fastest growing and largest regional car market by size in the UAE. Abu Dhabi, with moderate growth development, is propelled by modernization of fleet and acceptance of Green Vehicles, along with government services to replace older models, thus promoting the growth of UAE luxury car market. The “Others” category, which includes small emirates, advances at a slower pace. Dubai’s dominant market share is supported by vibrant consumer demand and extensive investment in the automotive retail and service sectors.
Leading UAE luxury car companies prioritize innovation, sustainability, and better performance to satisfy the changing needs of high-end consumers. They highlight electric and hybrid versions, featuring top-of-the-line technology like autonomous driving and connectivity options. Customer experience is prioritized through customized services and bespoke products. They also spend on local dealership expansion and after-sales presence to deepen the market footprint. Overall, their approaches seek to integrate luxury with environmentally friendly solutions for a tech-conscious, environmentally aware UAE customer base. A niche focus among the UAE luxury automobile market players is the inclusion of in-car wellness technology. Mercedes-Benz and BMW, for instance, incorporate amenities such as ambient mood lighting, air cleaning, massaging seats, and biometric sensing to promote physical and mental well-being during vehicle use. These technologies appeal to health-focused high-net-worth prospects desiring comprehensive luxury offerings. With the UAE fostering lifestyle and wellness tourism, these vehicle features appeal to local values of comfort, uniqueness, and technology-driven excellence over conventional performance and design standards.
BMW AG, which was founded in 1916 and has its headquarters in Germany, features luxury sedans, SUVs, and electric cars in the UAE, such as the BMW 7 Series, X5, and iX electric SUV, highlighting performance and state-of-the-art technology.
Mercedes-Benz Group AG, which was formed in 1926 and has headquarters in Germany, features premium sedans, SUVs, and electric cars in the UAE market, such as the S-Class, GLE, and EQC, that are recognized by luxury, innovation, and comfort.
Tesla Inc., incorporated in 2003 and based in the USA, retails premium electric vehicles in the UAE, including Model S, Model 3, Model X, and Model Y, with a focus on sustainability, advanced technology, and autonomous driving capabilities.
Volkswagen AG, founded in 1937 and based in Germany, offers luxury SUVs and electric vehicles in the UAE, such as the Touareg and ID.4, with a value proposition of German engineering, quality, and environmental-friendly innovation.
*Please note that this is only a partial list; the complete list of key players is available in the full report. Additionally, the list of key players can be customized to better suit your needs.*
Other key players in the report include Dr. Ing. h.c. F. Porsche AG, Toyota Motor Corp., General Motors Comp. (Cadillac), Maserati SpA, and Jaguar Land Rover Automotive PLC, among others.
Download your free sample report on the UAE Luxury Car Market forecast 2026-2035 to explore emerging trends, competitive analysis, and growth opportunities. Stay ahead with expert insights into the evolving UAE nutrition landscape and capitalize on market dynamics shaping 2026 and beyond.
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*While we strive to always give you current and accurate information, the numbers depicted on the website are indicative and may differ from the actual numbers in the main report. At Expert Market Research, we aim to bring you the latest insights and trends in the market. Using our analyses and forecasts, stakeholders can understand the market dynamics, navigate challenges, and capitalize on opportunities to make data-driven strategic decisions.*
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In 2025, the UAE Luxury Car market reached an approximate value of USD 4.70 Billion.
The market is projected to grow at a CAGR of 5.60% between 2026 and 2035.
The key players in the market include BMW AG, Mercedes-Benz Group AG, Tesla Inc., Volkswagen AG, Dr. Ing. h.c. F. Porsche AG, Toyota Motor Corp., General Motors Comp. (Cadillac), Maserati SpA, and Jaguar Land Rover Automotive PLC, among others.
The lithium iron phosphate battery type is gaining traction and anticipated to expand with a 15.1% CAGR through 2035.
Some of the main strategies fueling the market include increasing electric vehicle products, making use of digital selling platforms, improving customer experience with personalized services, spending on green technology, and focusing on high-end consumers through premium models.
Key trends in the UAE luxury car market include electrification, bespoke customization, digital retail, rising demand for luxury SUVs, certified pre-owned growth, younger tech-savvy buyers, sustainable materials, and limited-edition model popularity.
Explore our key highlights of the report and gain a concise overview of key findings, trends, and actionable insights that will empower your strategic decisions.
| REPORT FEATURES | DETAILS |
| Base Year | 2025 |
| Historical Period | 2019-2025 |
| Forecast Period | 2026-2035 |
| Scope of the Report |
Historical and Forecast Trends, Industry Drivers and Constraints, Historical and Forecast Market Analysis by Segment:
|
| Breakup by Type |
|
| Breakup by Drive Type |
|
| Breakup by Region |
|
| Market Dynamics |
|
| Competitive Landscape |
|
| Companies Covered |
|
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