Auto industry set to post single-digit sales growth

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Auto industry set to post single-digit sales growth

DUBAI — Despite the fact that the UAE automobile industry is one of the fastest growing markets within Gulf countries, its annual growth will remain in a single digit in 2011, according to industry specialists.

By Abdul Basit

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Published: Tue 23 Aug 2011, 11:08 PM

Last updated: Tue 7 Apr 2015, 3:47 AM

They said that the industry witnessed a six per cent growth in the first half of the year, compared to same period last year. While Gulf markets grew only one per cent in the first six months of the year, they added.

Analysts said tougher lending rules dent sales in the UAE during the first half. Car sales were hampered by regional unrest in some parts of the GCC countries and supply disruption after Japan’s earthquake.

They all are very optimistic about second half of the year, which records increased sales because of new models arrival.

“I’m not predicting more than a single-digit growth till end of 2011. But second half should be slightly better due to increased fleet business and 2012 models introduction,” Galadari Automobiles Company General Manager Axel Dreyer told Khaleej Times.

Galadari Automobiles is the sole distributer and retailer for Mazda vehicles in the UAE.

“Mazda Japan has recovered very quickly from the disaster happened in Japan and therefore, we had no major supply issues,” Dreyer said.

He said that the company had an excellent first half with more than 19 per cent growth in volume and an increased market share compared to last year.

Michel Ayat, Chief Executive Officer, Arabian Automobiles, said that the first half was very difficult for automobile industry in the Gulf region, but the UAE market performed much better than the region. Arabian Automobiles is the exclusive dealer of Nissan, Infiniti and Renault in Dubai and the Northern Emirates. While growth level was one per cent in the first half in other Gulf countries, some countries were even negative, he told reporters at a Ramadan Suhur the other day.

Ayat predicted that the industry is expected to witness a growth level between six and eight per cent in the UAE at the end of the year.

“Nissan recorded 18 per cent growth in first half compared to same period last year. We also succeeded to improve our market share in the first half,” he said.

He mentioned that after March Tsunami in Japan, the company did not experience supply shortage because of better management and closer relations with the Japan’s auto giant.

He said that Japanese models market share slight declined in the first half compared to last year it went down from 72 per cent in 2010 to 70 per cent in first six months of the year. Korean models are doing well, he added.

Citing one of the difficult areas, he said that strong yen is impacting on profit margin. “Despite this situation we are not able to increase prices for 2012 models,” he added.

He was very optimistic about the second half sales on new models. “We are launching Nissan June next month with high expectations,” he added.

Ramadan promotions

Auto dealers in the UAE have complained the Central Bank new regulations are too strict and have put off many consumers from buying new cars, which has led to a decline in sales. Now they are offering numerous Ramadan promotional offers to entice car buyers.

Car dealers in the country announced a lot of promotions at the beginning of the Holy month of Ramadan. Although only one week is left to avail Ramadan promotions, car dealers expect the last week will witness record sales.

“With our great product portfolio and Japan build quality we want to continue our strong growth strategy with Mazda and therefore, we released very competitive Ramadan activities with free insurance and registration, free service packages, lower interest rate with Emirates NBD and a Voucher for Window Tinting from our Ziebart business,” Dreyer said.

“The acceptance from the customers is very good and we are looking forward to achieve our target,” he added.

As part of its Ramadan promotional offers, Arabian Automobiles is offering buyers the opportunity to defer payments on a loan for six months when purchasing a Nissan. It is also offering zero per cent interest on financing for the first year for all Nissan Infiniti cars, as well as unlimited mileage warranty.

Al-Futtaim Honda, exclusive distributors of Honda vehicles, launched of its Ramadan offer across all its 10 showrooms in the UAE. Customers can purchase any Honda vehicle by paying as little as Dh999/- as down payment. In addition, customers purchasing from the Al-Futtaim group company will receive a free Toshiba 40” HD LED.

Al-Futtaim Motors, exclusive distributors of Toyota in the UAE is offering a fine opportunity to win one million dirhams to a lucky customer who purchases a new Toyota vehicle from any Al-Futtaim Motors showroom in the UAE during the Holy Month of Ramadan.

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