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Gaz-guzzlers back on UAE roads
The return of luxury cars and SUVs to UAE roads is a quite possibly a symbol that the worst of the financial crisis is behind us. Well, some of us, at least.
November 25, 2010 1:34 by Reuters
Passenger car sales are estimated to have risen 7 percent in the first nine months from a year ago, Ayat said. From January to August, some 146,000 cars were sold, a 6.6 percent increase.
That compares well to Europe, where car sales fell for a sixth straight month in September as demand suffered from the end of scrappage schemes and uneven recovery.
“People are starting to adjust their lifestyles again, and believe the situation has bottomed out,” said Anthony Silver, who recently bought a used car in Dubai.
PRICIER PETROL, TIGHTER CREDIT
Plans to phase out fuel subsidies in the UAE, the world’s No. 3 oil exporter, may trim demand for powerful cars, but a 26 percent jump in petrol prices this year has yet to hit sales.
“Fuel price remains still way below EU and U.S, levels,” said Stephanie Vigier, senior market analyst at IHS Global Insight in Paris.
But it is not just the market for luxury cars that is recovering. Japanese cars account for over 70 percent of the UAE car market and their sales are outpacing the overall growth rate, dealers said. At a Nissan showroom in Dubai, 10 to 15 clients pick up new cars every day, a sales manager said.
Back in 2008, when record oil prices helped fuel ambitious projects such as palm-shaped residential islands in Dubai, UAE car sales booked a 22 percent rise after a 37 percent jump in the previous year, driven by easily accessible loans.
Banks now ask that borrowers have a monthly salary of at least 5,000 dirhams ($1,362), up from 3,000 dirhams before the global crisis, Vigier said, a rule that is slowing car sales.
Some UAE banks have eased loan criteria since March, but often only when a large downpayment of the car value is made. Some banks have even doubled the maximum car finance credit limit, so borrowers can afford more expensive cars.
“Stricter banking rules and higher interest rates will curb new car sales,” Vigier said. “We think that it will be difficult to come back to the 2008 level as the government has learnt the lesson and will not open widely credits and car loans.”
(Editing by Lin Noueihed)
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