x Abu Dhabi, UAEMonday 24 July 2017

Car makers that have hit the skids

The UAE is a rare bright spot for car sales as they continue to grow.

Saab is one of a number of car makers still suffering from the fallout from the global financial crisis, when many major players were forced into bankruptcy proceedings.

All three Detroit-based car manufacturers - General Motors, Chrysler and Ford - are still in protracted talks with car unions over pay after both GM and Chrysler were bailed out by the US government in 2009 and then emerged from bankruptcy protection.

GM's bankruptcy in June 2009 led to the closure of thousands of dealerships, the loss of tens of thousands of jobs globally, including 8,300 in Europe, and the eventual sale of Saab to Spyker early last year.

Global car sales have bounced back this year, increasing 5 per cent in the first half compared with the same period last year, despite sovereign debt issues in Europe and a dramatic fall in supply from Japan following the March earthquake.

Not all car makers are feeling the effects of the financial crisis, with BMW doubling profits in the second quarter of this year due to strong demand from Chinese and Middle Eastern markets.

The UAE is also a bright spot in the global gloom as the car market grew 19.7 per cent last year to US$11.1 billion (Dh40.77bn), up from $9.2bn in 2009, according to a recent study by the Ministry of Foreign Trade.

Dealerships across the Emirates have also fared well, experiencing strong growth in the first quarter that began to plateau in the second half as the Central Bank introduced rules restricting excessive car financing.

Many of the major players experienced a surprisingly strong Ramadan.