UAE car sales to rebound strongly in 2011

Car sales in the UAE are expected to rebound significantly in 2011 as the economy recovers from the crisis and experiences the benefit of higher oil revenue, Business Monitor International said in a report.

The UAE is expected to see growth continue in the medium term, but the rapid growth in the 2010-2011 period will be unusual due to the tailing off of the rebound and a return to more normal growth patterns in the broader economy and for consumer spending.

The new car market is not the only booming sector, however, as the second-hand car market in the UAE is registering annual sales of 100,000 units and is worth a total amount of Dh5.5 billion ($1.5bn).

UAE-based Arabian Automobiles, the exclusive vehicle dealer for Japanese automaker Nissan Motor in Dubai and the northern Emirates, registered a 40 per cent increase in its second-hand car sales in 2010. It also registered an increase of 11 per cent in new car sales, according to Arabian Automobiles' CEO Michel Ayat.

The dealer expects sales of new and used cars to equalise over the coming years owing to the rising popularity of pre-owned vehicles in the region.

Luxury car dealers and service centres in the UAE are expecting a windfall from customisation services once the country reforms its road traffic laws. Zawya reports that the government is currently in the process of adapting road traffic laws to allow a far broader range of customisation of cars. Currently many customisations either require permission or, more commonly, are prohibited by the laws of the country.

New information about the purchasing habits of UAE consumers is also being uncovered. According to a recent survey, the New Vehicle Buyer Survey, has found that 66 per cent of all new car purchases in the UAE are made by customers between the ages of 18 and 29. Furthermore, first-time buyers make up 61 per cent of all new car sales, due largely to the young demographic profile of the UAE as a whole.

The survey is an important source of information on the nature of the UAE's car buying public. Further important information revealed includes the revelation that car buyers in the UAE usually make brand choices based on seating and ride comfort in addition to styling and reliability. The styling aspect is particularly important in the UAE, where cars have long been an extension of an individual's public image to an extent which is not seen in European markets, for example.

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