Credit: Visual China

BEIJING, October 31 (TMTPost) – Nezha, affiliated with Chinese all-electric car brand Hozon Auto, has recently signed a strategic cooperation agreement with car dealers in the United Arab Emirates (UAE) in a bid to launch multiple models in the Middle Eastern market in 2024, according to information released by Nezha on Monday.

In addition to whole car sales, Nezha may also set up research and development and production units in the UAE. According to a report by Emirates News Agency (WAM) on October 17, Nezha plans to build a research center and an assembly plant in an automotive industry park in Abu Dhabi, the capital of the UAE. The industrial park project was led by the Abu Dhabi Department of Economic Development (ADDED) and the Abu Dhabi Investment Office (ADIO). Nezha has not commented on this.

Nezha has established a subsidiary in the UAE. According to the company's announcement, the UAE subsidiary is recruiting employees for departments such as delivery management, channel development, and marketing.

Thailand was Nezha’s first overseas stop, with the company entering its local market in August 2022. In September 2023, Nezha announced that it had sold over 10,000 units in Thailand. The company is building a factory there. On October 18, its CEO Zhang Yong said that the factory in Thailand is expected to start production in the first quarter of 2024.

Nezha said that the company plans to focus on the Asia-Pacific and Middle East markets in 2024, actively expanding in the European Union market. The company already has a presence in Latin America and Africa. In 2024, the company aims to achieve overseas sales of 100,000 units. In the Middle East, Nezha has already entered the markets of Israel and Jordan, but no specific sales figures have been disclosed.

The UAE has recently become a popular destination for Chinese new energy vehicles going abroad. Since 2023, high-end new energy brands under BYD (002594.SZ / 01211.HK) and Geely Automotive (00175.HK) have ventured into the UAE.

According to data from the China Association of Automobile Manufacturers (CAAM), in the first eight months of 2023, the UAE was the ninth largest target market for China's vehicle exports, with a cumulative export volume of nearly 100,000 units.

The UAE has an annual car sales volume of about 200,000 units, and its new energy market is still in the nascent stage. A report by consulting firm Arthur D Little in 2022 predicted that the demand for electric cars in the UAE would continue to grow, with a compound annual growth rate of 30% from 2022 to 2028.

Among the Chinese cars exported to the UAE nowadays, the gasoline car is the most common type. Although the proportion of new energy vehicles is low, it is on the rise. In addition to Chinese car companies, European car manufacturers such as BMW and Volkswagen, Japanese car manufacturers like Toyota and Honda, and American car manufacturers like Tesla and Ford have also entered the UAE with their new energy vehicles.

In November 2022, the UAE unveiled the "We the UAE 2031" vision, aiming to overcome "dependence on oil" and achieving green energy transformation though technological innovation. According to The National, a private English-language daily newspaper published in Abu Dhabi, the UAE has replaced about one-fifth of government agency vehicles with electric cars, and the number of nation-wide charging stations has increased by about 60% to 800 in the past three years.

Saudi Arabia, the UAE’s neighbor, is also embracing electric cars. According to data from the CAAM, in the first eight months of 2023, China exported about 134,000 vehicles to Saudi Arabia. The country ranks the fifth on the list of destinations for China's vehicle exports.

On October 20, the electric car brand BeyonCa signed an investment and strategic cooperation memorandum with the Saudi-based investment group Al Faisaliah Group Holding Company (AFG), planning to bring intelligent electric cars and the electric car industry ecosystem into Saudi Arabia.