Buyers of luxury cars are not being intimidated by formidable prices, judging by the crowds at the Dubai Motor Show.
Luxury is still driving concern
DUBAI // Mumtaz Muslim takes his time inspecting the gleaming silver Bentley Mulsanne that is on display. He touches the winged emblem on the hood, sits in both the driver and passenger seats and puts his foot beneath the front bumper, and lifts it up and down to gauge the vehicle's clearance. Such attention to detail might be well advised as the Bentley has a starting price of Dh1.4 million (US$381,000).
The Dubai-based businessman said that for those who still have the cash, top-of-the-line cars are still on shopping lists despite the economic downturn. "I like luxury. I don't like those other cars," he said, pointing at the displays of some mid-market exhibitors at the Dubai International Motor Show. The show opened to the public yesterday, featuring more than 200 companies. Car aficionados perused the newest models, digital cameras in hand. From the fastest production car in the world, Shelby Supercars Ultimate Aero, to Luxgen's new line of so-called intelligent cars, the show features 13 global premieres and 40 regional ones.
Overall, the UAE car market has been hard hit by the economic downturn as many potential car buyers no longer qualified for financing after banks tightened lending criteria. It is expected to shrink by 8.5 per cent this year from last year, the research firm Business Monitor International (BMI) forecast. "Although there are signs of improvement from dealers who have reduced inventories and plan expansions in 2010, I don't think it will be enough for a complete turnaround before the end of the year," said Anna-Marie Baisden, the head of automotive research for BMI. It sees 8 per cent growth next year.
Manoj Abraham, an aviation engineer with Emirates Airline, was window-shopping at the exhibition for a new 4x4. "I was driving a very expensive car, but I got rid of that and I'm thinking of buying two cars," he said. Just two months ago, the self-professed "car freak" sold his 335 BMW Coupe, a vehicle worth about Dh268,000, and bought a 2009 Volkswagen Golf. With the remainder, he plans to buy a four-wheel-drive vehicle, which is a more practical option for his family of four.
Angela and Vladimir Gutorov were looking to buy three or four cars to sell back to clients in their native Kazakhstan as well as in Russia through their Dubai-based business, Nashwan. But unlike the luxury cars they eyed in the past, they were focusing on more affordable choices, said Mr Gutorov. "Before I bought Mercedes, Cadillacs, Lexus and Lamborghinis," he said. "Now, they only want Prados and Camrys."
Mike Devereux, the president of General Motors Middle East, said it had been a tough year for the entire industry, but it was starting to recover. It has been a tougher year than most for the American car maker GM, which emerged from bankruptcy protection earlier this year, but the region has been among its strongest, he said. While sales in the UAE this year are down about 45 per cent, but other markets such as Iraq and Syria are posting double-digit growth.
"While we did not make as much money as we would like, we did not lose money in the Middle East," he said. Khalid Dadoush, the general manager of Al Habtoor Motors, which sells Bentleys, Aston Martins and Bugattis in the region, said the market was starting to rebound. He estimated that Al Habtoor had sold at least four Bentleys yesterday, the same number it had sold in all of February this year as the downturn started to bite.
Last month, it sold 12 Bentleys, and expected to sell 17 this month. "This is not going to be a dying market, in fact, it will pick up," he said. "It will not be as good as it was two years ago, but it will be back to 80 per cent, at least." But perhaps in the biggest sign of faith in this market's potential, a French company is offering to coat cars in gold leaf. Jean-Christophe Rousseau, the owner and manager of Gold Emotion, said his offerings included 12 shades of gold leaf as well as 24 carat gold.
With prices of the precious metal reaching record levels, it is an expensive endeavour, but Mr Rousseau believes the price of about ?40,000 (Dh213,800) to cover a 4x4 has appeal in this market. "Here, they like personalised cars and they are able to put a lot of money for options. What we propose is something you can't find every day." @Email:firstname.lastname@example.org