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Dubai: Automobile dealers in the UAE will still be making money next year, but overall sales growth could decline slightly when the impact of the global financial crisis is likely to hit home, sources said on Wednesday.
Job cuts and a slowdown in the local real estate sector, the credit squeeze imposed by banks, perennial traffic congestion on Dubai's roads and tightened rules over the issuance of new driving licences are just some factors that could hinder growth.
From January to September this year, the total automotive market in the UAE grew by 28.7 per cent compared to the same period last year, as evidenced by the growing number of vehicles in the country.
In Dubai alone, where the vehicle population is growing by 12 per cent every year, there are about 541 cars for every 1,000 residents. Dubai's vehicle-to-population ratio is higher than that of New York (444), London (345) and Singapore (111).
Overall, the UAE's vehicle population stands at 1.5 million. The UAE is considered to be a major market for cars in the GCC region due to the massive projects launched in the construction sector, as well as the number of international firms that set up offices in the country.
According to Mohammad Akel, brand manager for Nissan at Arabian Automobiles, the car market in the UAE expanded in the early part of the year due to salary increases in the government sector, the construction boom in the UAE and a massive influx of expatriates and tourists.
'Drop a little'
"The market is still growing and the impact of the crisis has not yet affected the UAE," Akel told Gulf News. "But if you take into account the congestion in Dubai, as well as the RTA's strict rules on driving licences, aside from the global economic slowdown, the growth in the automobile sector could drop a little bit next year."
Akel clarified that his forecast is for the UAE's automobile market in general and has nothing to do with Arabian Automobiles' growth expectations.
According to the company's EO, Michel Ayat, they remain upbeat about future growth, as their car sales by the end of the year are likely to log 40,000 vehicles, up 40 per cent from last year.
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