Further cut in prices to lure car buyers

Some car dealers have slashed their prices further since the Ramadan promotional period ended while others are continuing the special offers that were launched during the month, said industry players.

The most attractive discounts are being offered mainly in the top-end luxury segment as showroom bosses try to clear their stocks of 2009 models.

And dealers expect sales to pick up as new models are introduced over the next three months. Banks have eased lending restrictions and people who have money are starting to spend it, they said.

"We reduced the price of a Mitsubishi Pajero by Dh6,000 after the Ramadan sales promotion period ended," said a salesman at Al Habtoor Motors. "We are also giving free insurance for two years, free servicing for 50,000km and other benefits to post-Ramadan buyers."

In addition, the company is offering customers a scheme that allows them to buy now and pay next year.

"The new promotion will run until November 21 and allow new car buyers to postpone making loan instalments for three months and start paying from the New Year," added the spokesman.

And another promotion gives buyers a chance to win a trip to London to enjoy the New Year celebrations. Habtoor gave away free petrol cards to customers during Ramadan.

Al Futtaim Motors, which distributes Toyota vehicles, is continuing to run special offers on models such as the RAV4, Sequoia, Fortuner, Prado, Corolla, Camry and Avalon.

Japanese car sales have fallen steeply all around the world, mainly due to the economic crisis and the strong yen, but recent fluctuations in the yen-dollar exchange rate and the strengthening of dollar have come as a relief to dealers.

An insider at one dealer said: "The Japanese yen has been a weak point for the brand and we don't want to spoil the brand by slashing prices. The market situation is improving slightly and our 2010 models will be priced higher than the current models. Price levels have reached rock bottom and there is no further scope for reductions."

Sales of both new and second-hand cars have started picking up in the last two months, mainly because people are now more prepared to spend their money as the uncertainty caused by the downturn is easing.

TV Krishnan, Sales Director of Green Valley Used Cars in Al Aweer, said: "There were two main reasons for declining cars sales during the recession. People with money did not spend it because they feared there would be a prolonged recession and banks stopped financing new and used cars.

"Now for the past two months, car sales have been picking up because people with money became used to the recession and started spending money. Banks have also eased lending terms for new and used car buyers.

"Over the next two to three months, the 2010 models will be launched and that will generate some excitement in the market, so car sales in the next three months will be good. This is the right time to get a 2009 model car at a good price."

Car dealers vied with each other to attract customers during Ramadan with special promotions and offers. Arabian Automobiles, for example, offered savings of Dh10,000 on the purchase of a new Nissan car with the option of a zero down-payment.

The offers included instant cash vouchers worth Dh10,000 introduced by the Juma Al Majid Establishment, which distributes Hyundai vehicles and costly free gifts such as laptops and other electronic gadgets.

Meanwhile Arabian Automobiles has started sending its sales staff to the customer's doorstep. Under the personal sales executive scheme – available for the first time in the UAE – staff will knock on the doors of customers who submit their details through the company's website.

 

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