x Abu Dhabi, UAETuesday 23 January 2018

Ford sales rise in region

Pick-up trucks and 4x4s still top shopping lists for car buyers in the Middle East, according to Ford, contrasting with global trends towards smaller vehicles.

Pick-up trucks and 4x4s still top shopping lists for car buyers in the Middle East, according to Ford, contrasting with global trends towards smaller vehicles.

Regional sales by the US car giant are up by almost a third so far this year compared with last year.

Saudi Arabia had the biggest appetite, with sales up by 50 per cent in the first nine months of the year, compared with the same period last year. In the UAE, however, sales were up a more modest 10 per cent in the same period.

Larry Prein, the managing director of Ford Middle East, said the surge in sales stemmed from interest in new models and high demand from large markets such as Saudi Arabia.

"Some of it's due to strong growth in Saudi Arabia," he said. "The economy overall is strong, they're lobbying for infrastructure projects and things like that. The UAE is growing by about 10 per cent. We're seeing a more stable environment, a little bit of growth. But not back to where it was in 2008."

The rise in sales is good news after a tough year for the region's car dealers.

While there are no official figures for the UAE car market, the research company Business Monitor International estimates sales shrank by about 8.5 per cent last year to 324,900 vehicles, some of which were destined for re-export.

The country was particularly hard hit after banks began to curtail car financing early last year. They tightened criteria such as minimum salary requirements and rejected some potential buyers, while many consumers put off non-essential purchases such as cars.

"It seems like the people who are buying cars now have better credit or some of the bad credit has been washed through the system," said Mr Prein. "But most of the people who are buying a car now have found a way to get the financing."

Sales of pick-up trucks and 4x4s were up by 27 per cent. Passenger car sales increased by 34 per cent.

Although petrol prices have risen twice this year, 4x4s are likely to continue to be popular in the region, said Anna-Marie Baisden, the head of car research for Business Monitor International, which is based in London.

"We do not see any reason for the popularity of SUVs to dwindle, as they are a big part of the premium segment that is still so strong in the UAE and suit the local driving conditions. However, at the same time we are also seeing the growth of volume brands and smaller cars."

Mr Prein said there was increased regional interest in fuel-efficient vehicles but that had not triggered a shift to smaller cars.

"There is more interest in fuel economy and how far you can go between fill-ups," he said. "In some cases, people are maybe looking for smaller vehicles, or they're just looking for vehicles to deliver better fuel efficiency … There is more awareness of it. I'm not sure it's really permeated into a lot of buyer decisions yet."

Ford plans to roll out five new electric or hybrid vehicles in the next couple of years but the company is still examining whether to bring them to the Middle East, he said.

"The issue really here is the infrastructure, charging stations, as well with the extreme heat - battery life gets degraded quite a bit."

Ford's engineering team will look at these vehicles and decide whether they make sense for the region, he said.

"With the extra costs and, in a lot of cases in the GCC, the low cost of fuel, they probably don't."