Bucking the general trend in Europe, more vehicles are being sold in the Emirates this year than last.
UAE car sales leave others behind
K Rajaram is keeping his fingers crossed sales keep growing.
But the superstition is superfluous. The expansion of the industry he works in appears to be unstoppable.
"When we compare the GCC auto market with other global markets, the region has a high ratio of cars per household," says Subhash Joshi, the programme manager at the automotive and transport practice at Frost & Sullivan.
"While the GCC does not possess a sizeble domestic automobile manufacturing [sector], its high national wealth driven by favourable oil prices and high demand has created a niche and presents enormous untapped opportunities," he adds.
Last year, there were more than 245,000 cars sold in the UAE - a 25 per cent rise on 2011 figures.
This year Frost & Sullivan projects the number will reach 370,000 vehicles, an increase of almost 38 per cent if it transpires.
Al Tayer Motors recorded growth of more than 25 per cent in sales of Jaguar Land Rovers in the same period.
Abu Dhabi Motors, which was last month named Rolls-Royce's Best Bespoke Dealer Worldwide for last year, registered a 39 per cent increase in sales of cars in the first quarter.
Meanwhile, Emirates Motor Company reported a 23 per cent rise in sales in the first three months.
In fact, in year-on-year percentage change terms, the current growth in the Arabian Gulf region is only eclipsed by surging demand in the Asean (Association of South East Asian Nations) region, says Neil King, an automotive analyst with Euromonitor International.
Car sales in China and the Americas in particular are gathering pace, he adds.
But the news is not so good elsewhere in the world. Russia is in neutral and India is rolling backwards but the real drag on demand is still in Europe.
The question is: what is driving the growth in the UAE when car sales in some regions of the world are still stagnating?
A number of factors affect car sales, including credit availability, incomes, interest rates, fuel prices, employment and overall business and consumer confidence, says Mr King.
But the most important factors behind the growth in the UAE are the "amicable macroeconomic conditions" in the country and household spending, says Mr Joshi.
Increased access to vehicle finance and rising migration from other countries has helped sustain the growth, he says.
"Additionally, the jobs market and overall sentiments improved in 2013, which has enabled a surge in expats moving to the city, and their instant priority is buying a car due to inadequate public transportation system and weather conditions," adds Mr Joshi.
Many people here are also earning higher salaries in comparison with 2011 and last year, which has led to an increase in household spending power.
"Other factors include [the fact that] automotive majors look at the UAE as a key access point to the growing Middle East market. Lastly, Dubai is the only market in world which offers the highest number of car variants - which attracts a young generation that accounts for majority of UAE working population," says Mr Joshi.
But that is not the whole picture, according to dealers and manufacturers.
"We have seen the number of people using Dubai Airport go up to 10.6 million and the occupancy of the hotels was about 90 per cent in January for the top 10," says Salah Yamout, the director of sales and marketing at Arabian Automobiles Company.
That is important because an influx of tourists leads to more car sales for rental fleets.
"The rental and leasing business is growing in the UAE and everyone is expanding. We are seeing the increase on the retail and on the fleet," adds Mr Yamout.
Fleet purchases generally account for between 25 and 35 per cent of sales of Volkswagen cars and about 30 to 35 per cent of Audis by Al Nabooda.
But in the first three months of the year, almost half - 400 of the 982 Volkswagen cars sold by Al Nabooda - were for fleet operators.
"We did a huge deal with Thrifty rent a car," says Mr Rajaram.
There is, however, one other factor in the rise of car sales in the UAE, particularly last year - the earthquake and resulting tsunami in Japan in 2011.
"You had a dip in the market, which was linked to the disaster. As the Japanese brands [were] all affected and are above 60 per cent of the market, this has strongly affected the total industry volume," says Samir Cherfan, the managing director of Nissan Middle East.
"The recovery effect has expanded the natural organic growth," he adds.
Car sales are expected to keep growing this year but a change could be afoot.
At the moment the market is overwhelmingly dominated by sales of new cars. Estimates suggest that just 125,000 used cars will be sold in the UAE this year, compared with about 370,000 new cars.
"If we put them together the growth of the future is going to be coming from the used-car industry," said Mr Yamout.
"It is likely that the cost-conscious consumer might favour the used car in place of a new car [in the future]," says Mr Joshi.
That will affect dealers' sales, as only about 25,000, or 20 per cent, of the total 125,000 used cars are sold via organised channels such as certified dealers.
"There is a huge potential for growth there," says Mr Yamout.
But many dealers are now cashing in on an effort to tap into this lucrative space.
Al Habtoor Motors has just opened a Car Zone megastore branch in Dubai Investments Park. And Arabian Automobiles established a certified programme in used cars a few years ago, going a step further this year by opening a showroom in Sharjah with room for 200 used vehicles.
"It has been proven to be a very smart choice," says Mr Yamout.
"We have seen Sharjah growth in the first quarter go up by 40 per cent from last year, so it's actually faster than the growth of the [whole] market. It has huge potential."