An integrated auto hub for Dhofar’s growth market
Salalah Automobile City is being developed by Al Amal Al Daem International Company in partnership with Dhofar Municipality as a specialised destination for the automotive sector. According to Oman News Agency and local press reports, the first phase spans 53,000 square metres and focuses on core infrastructure and commercial components. The RO6mn budget covers construction, site development and the fit-out of key facilities.
As of mid-August 2026, project execution has reached around 45%, with completion of phase one targeted for May 2027 and operations set to begin in the second quarter. The hub will cluster car showrooms and dealerships, maintenance centres, tyre and battery outlets, spare parts businesses and car care services in a single complex. Banks, finance companies and insurers will also have branches on site, giving customers one-stop access to purchasing, servicing and financing.
By concentrating these services, the project is designed to deepen Dhofar’s role as a regional automotive centre rather than a pure tourist destination. The model aligns with trends in Oman’s car market, where the used car segment alone is estimated at about US$1.06bn in 2026, according to data from a sector research firm. As a result, the hub positions Salalah to capture more value from both new and used vehicle flows across southern Oman and neighbouring markets.
One local analyst summary captures the strategic logic neatly: Oman is turning Salalah from a seasonal gateway into a year-round automotive service base for the wider region.
How does the project fit Oman’s wider diversification push?
The Automobile City launch sits within a broader effort to attract industrial and logistics capital into Salalah and the wider Dhofar governorate. In November 2025, Salalah Global City Company and China’s Jiangsu Changhong Intelligent Equipment signed an agreement to establish an automotive factory in Salalah, supporting upstream vehicle assembly and related manufacturing. This planned plant complements the downstream retail and service focus of Salalah Automobile City, creating potential synergies across supply chains, distribution and after-sales support.
Meanwhile, the state-owned Public Authority for Special Economic Zones and Free Zones has been accelerating investment agreements to drive industrialisation. In April 2026, the authority signed deals worth more than RO200mn across Oman’s free zones, according to official communications, with incentives such as long tax holidays, full customs exemptions and 100% foreign ownership designed to attract regional and global investors. As a result, Salalah Free Zone is now pitched as a regional business launchpad offering zero corporate tax and streamlined investor services.
These moves support the sultanate’s diversification agenda as it seeks to reduce reliance on roughly one million barrels of crude oil production per day for fiscal revenues. Automotive services, light manufacturing and logistics all form part of this shift, alongside growth in tourism and other non-oil sectors. Salalah Automobile City sits at the intersection of these themes, linking consumer demand, trade flows and industrial capacity in one location. This connects to Oman’s broader push to develop the Salalah corridor as a regional freight and logistics route.
What does this mean for investors?
For institutional investors, the cluster offers several angles. Property and infrastructure investors can track leasing demand from car dealers, banks and insurance firms. Supply chain investors can assess how the planned automotive factory and the hub interact with Salalah’s port and free zone. Regional banks and insurers can use the complex to scale consumer finance and protection products tied to vehicle ownership.
As the first phase moves towards completion in 2027, investors and policymakers should watch three signals: the speed of tenant uptake, the integration with Salalah’s free zone incentives, and the pace at which automotive manufacturing projects in Dhofar convert from agreements to operating plants.
Quick answers
Phase one is targeted for completion in May 2027, with operations scheduled to begin in the second quarter of 2027, according to project reports from mid-August 2026.
The first phase carries a budget of RO6mn (approximately US$16mn), covering construction, site development and fit-out across a 53,000-square-metre site.
The hub will house car showrooms, dealerships, maintenance centres, tyre and battery outlets, spare parts businesses, car care services, and on-site branches of banks, finance companies and insurers.
