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…