» Wind in UAE car sales?

Confidence in a recovering economy is best seen in the rise in purchases of luxury goods, such as cars. According to analysts - who hopefully know more than we do - the signs are good for the motor industry

According to Business Monitor International (BMI) who produce analyses and forecasts on global industry trends and regional economic risk, in 2010 the UAE is expected to see an increase of 8.5 per cent in new car sales from 327,517 to 355,117. However, according to dealers they believe that this figure may be a little too ambitious from what they are experiencing on the ground.

Graham Turner, Chief Executive of Al Ghandi Auto Group who are the regional dealers for General Motors products told Gulf News: “I’d like it to be like that, but we’re still in a little bit of a turmoil. I think it’s going to be in the 6 or 7 per cent increase range.”

Despite an abundance of new models, dealer discounts and more attractive loan and credit agreements, the all-important issue is consumer confidence which still seems slow to return, with many people still wary about the economy and their jobs.

Having believed the hype before the ‘economic readjustment’ we are still receiving contradictory reports about the state of the auto industry in the UAE. The Road and Transport Authority (RTA) claimed a massive slump in new car sales last year (citing the opening of the Metro, improved public transport, and cost of learning to drive as reasons), then in the first few months of 2010 the manufacturers claimed to be significantly ‘on the up’ again.

So this new report from the BMI might seem ill-founded – unless you take into account that Dubai and the UAE is a large re-export market. Says Esam Abu Nabaa, President of Hyundai at Juma Al Majid Establishment: “This figure could include a lot of re-exported cars. We shouldn’t forget that Dubai and the UAE is a hub for the re-export market. Hence a lot of the imported car figures include numbers of the cars that are re-exported.”