It looks to be a good year for the UAE’s automotive industry, with signs that it might shoot ahead the figures for 2010.
The UAE automotive market grew by 19.7 per cent in 2010 to US$11.1 billion (Dh40.7 billion) up from US$9.2 billion (Dh33.7 billion) in 2009, according to a recent study by the Ministry of Foreign Trade. Trade in small passenger and luxury cars grew by almost 24 per cent to US$10.6 billion in 2010 compared to US$8.5 billion in 2009, the study summary said.
Domestically, car sales in the UAE in 2010 increased by 10 per cent to US$42.4 billion compared with US$38.5 in 2009, it added.
“This year we have definitely seen the highest growth in sales since the recession,” said Kamal Al Shakhkshir, sales manager at Hyundai in the UAE.
According to Al Shakhshir, Hyundai in the UAE witnessed a 40 per cent growth in sales in 2011 for the first seven months of the year compared with the same period last year. He added that sales had slowed in June and July.
New models
“For Hyundai, the strong sales came from the new models we have introduced,” he said.
However, the UAE Central Bank’s regulations on car loans have set some limitations on the retail business. The new regulations require car buyers to place a down payment of at least 20 per cent of the price of the car in order to make a purchase via a car loan from a bank.
“It has slowed down work, but we expect to maintain the same growth of 40 per cent for the whole year,” he said.
“I believe that the market is going to be stable after Ramadan for the rest of the year,” he said.
Arabian Automobiles recorded an 18 per cent growth in sales during the first half of this year compared with the same period last year, according to a spokesperson for the company.
However, he said that the UAE’s automobile market grew by only six per cent during the first half of 2011 compared with the same period last year because of several reasons, one of which was the hit the car industry in Japan got.
Japan’s domestic sales of new cars, trucks and buses dropped 37 per cent from a year earlier in March, as the devastating earthquake and tsunami in March disrupted domestic production for all automakers and cut off vehicle supplies to dealers, according to the Japan Automobile Dealers’ Association.
The massive quake and tsunami hit auto assembly and parts manufacturing plants in north-eastern Japan, causing parts shortages for domestic and some overseas car makers.
Car franchise holders in the UAE, in the past few months, started to take precautions and cut re-exports to regional markets as supply disruptions hit the market in the wake of Japan’s earthquake in March 2011.
Japanese auto spare parts manufacturers were also affected by the disruptions. Data revealed that, prior to the disaster, UAE imports of luxury and small passenger cars grew by 41 per cent.
Japan’s exports to the UAE stood at US$2.3 billion in 2009 and grew by 47 per cent in 2010 to US$3.4 billion.
Arabian Automobiles expects the second half of the year to perform even better than its first. “I also feel that the UAE will grow in a high single digit in 2011,” the spokesperson said.
