UAE vehicle sales decline 40% as loans dwindle

UAE vehicle sales decline 40% as loans dwindle

04/02/2009 09:04 AM | By Shakir Husain, Staff Reporter

Dubai: Car sales nationwide fell more than 40 per cent in January and February amid tightening bank conditions for automobile loans and low consumer confidence, the head of a leading car dealership said on Thursday.

If banks continue to impose strict criteria for car loans, sales are unlikely to improve anytime soon, said Michel Ayat, chief executive officer of Arabian Automobiles Company (AAC), the Nissan, Infiniti and Renault dealer in Dubai and the Northern Emirates.

“Indications are that there was a drop of 40 per cent to 45 per cent in sales as a whole in the UAE in the first two months. The numbers for March are still not available,” he told Gulf News, citing data from leading global car manufacturers with a strong local presence.

Al Futtaim Automotive, which represents several global brands, including Toyota, in the UAE, said sales have fallen back to the 2007 level.

“The global crisis has brought sales down from the unusual peaks of 2008 to 2007 levels, but we are optimistic the UAE’s resilience will see auto sales bounce back significantly,” an Al Futtaim spokesperson said and noted that there was “a positive growth in both enquiries and car sales” for new and old vehicles between January and March.

More than 80 per cent of individual car purchases locally are through bank financing, and potential buyers are discovering that conditions of loan eligibility have become stricter in the economic downturn…

Banks Getting Tighter With UAE Car Loans: You Could Be Rejected!

Bank denials are up to 20-30% now for new car loans…

Banks rejecting more vehicle loan applications in region

http://archive.gulfnews.com/articles/08/11/27/10262874.html

11/27/2008 12:02 AM | By Shakir Husain, Staff Reporter

Dubai: The impact of the global financial crisis is spreading to the Middle East auto industry as there has been a surge in the number of vehicle loan applications being rejected by banks.

A senior General Motors official told reporters in a conference call yesterday that the rate of rejections has risen from five per cent to more than 20 per cent.

The UAE and Qatar are among the markets that have seen a significant rise in these cases.

The situation is different in Saudi Arabia, where there are more cash buyers than customers purchasing cars through bank financing, General Motors Middle East operations president Mike Devereux said.

In the UAE, 70 per cent of the company’s cars are sold through bank financing.

“We used to have rejection rates throughout the Middle East of about five per cent.

“Now all manufacturers are seeing rejection rates in the range of 20 to 30 per cent,” he said.

Devereux said the company and its dealers are talking to banks in the region to ease credit for car purchases.

General Motors, which has approached the US government along with Ford and Chrysler for funds to overcome a credit freeze, sees the Middle East, Russia, China, Brazil and Turkey as future growth markets amid falling vehicle sales at home.