x Abu Dhabi, UAE Thursday 20 July 2017

Middle East car sales robust

Carmakers say they hit a rough patch in the normally car-crazy UAE market this year, but sales have stabilised and the region continues to be one of the most robust worldwide.

The SLS AMG Mercedes-Benz on display during the Dubai International Motor Show at the Dubai International Convention Centre.
The SLS AMG Mercedes-Benz on display during the Dubai International Motor Show at the Dubai International Convention Centre.

More than 200 car makers from Aston Martin to Volkswagen are showcasing their wares at the Dubai International Motor Show, which opens to the public today. The regional car market has been hurt by the global economic downturn as banks started tightening lending criteria and rejecting applications for loans. However, dealers in the Gulf are outperforming their counterparts around the world, said Geoff Dowding, the regional director for Asia and the Middle East for the Bentley marque. "The UAE and the Gulf in general is an important market for Bentley," Mr Dowding said. "We have tremendous dealers who have been with us a long, long time and they really understand us well. And their percentage of what we sell globally is gradually increasing on a year-by-year basis." Although sales at the luxury brand were down by 22 per cent in the first half of the year, Bentley is now on track to sell 550 cars in the region in the 12 months ending December 31, almost the same level as last year, he said. By the end of the year, Bentley's top dealership globally will be in either Saudi Arabia or the UAE, ahead of London, Beverly Hills and Moscow. Still, sales have taken a steep drop from the double-digit growth from which car sellers have benefited in the past. The UK research firm Business Monitor International has estimated the UAE market will shrink by 8.5 per cent this year. About 324,900 vehicles will be sold, some destined for re-export, it said. Al Futtaim Motors, which sells the Lexus and Toyota brands in the UAE, estimates it will sell between 55,000 and 66,000 cars in the country this year compared with 98,000 last year. However, Hugh Dickerson, the company's general manager of sales and marketing. said he was pleased with their performance given that the overall UAE market "fell off a cliff". "The cake got smaller but our slice of the cake got bigger," he said. Although local car buyers are looking for more value, they are not downsizing to cheaper, smaller cars, as are their counterparts in the US and Europe, said Len Hunt, Al Futtaim's group director for the automotive division. "As soon as the crash hit they went from bling to value. Even if they had the money, they did not spend it," Mr Hunt said. "We did not see that here." Mercedes-Benz sales this year have dropped by 19 per cent in the region to roughly 15,200 cars, said Frank Bernthaler, its regional director of sales and marketing. Still, the region is key for Mercedes, he said. It has launched a special GCC edition of the 55 AMG, a four-wheel drive. "The UAE market is still strong. Yes, we have been affected, but we haven't been affected that much in terms of western Europe," Mr Bernthaler said. Although most UAE dealers are expecting flat sales or modest growth next year, many are making new investments in the region or offering new brands. @Email:aligaya@thenational.ae