Toyota sees 3-5% growth in GCC

Dubai: Toyota Motor Corporation, which last week overtook General Motors as the world's top automaker, sees Gulf automotive sales declining to 3 to 5 per cent this year, after recording nearly 20 per cent growth year on year for the last few years, a top official said.

"The market is in an adjustment phase and is expected to make a moderate growth by 3 to 5 per cent in 2009," Hajime Sakaguchi, Toyota's general manager for Oceania, Middle East and South Asia Marketing Division, told Gulf News on Sunday.

"After a 20 per cent growth year on year for the last five years, we see the regional car market slowing. The market recovery is expected to start in the second half of 2009, and we are prospecting a steady growth again in 2011."

Toyota last year sold 8.97 million units - higher than General Motor's 8.35 million units - to overtake the crown from the US auto giant which had ruled the market for 77 years.

The global automobile market shrunk 3.7 per cent to 69.1 million units last year, down from 71.8 million in 2007.

Toyota sold 516,000 units in the Gulf, nearly 35 per cent of the 1.4 million units sold in the region by all automakers in 2008.

However, as the impact of the global credit crunch affect businesses in the UAE, concerns are growing among automakers on falling sales.

"It is a challenging time for the UAE. I expect the UAE market to remain flat this year, with a possible upturn by the last quarter," he said.

"But this might not return to the same 20 per cent growth level. We expect this to climb back to 10 per cent by 2010-2011."

Despite the declining growth, Sakaguchi said he remains optimistic.

Per capita car ownership in the UAE is roughly 200 per thousand people, much below the US where the market is in near saturation level of 780 per thousand.

"The governments in GCC countries are possessing surplus finance treasury due to high oil price in the past few years, and announcing aggressive 2009 annual government budgets," he said.

"The population in the GCC is surely increasing, especially the population of those who can acquire driving licences are expected to increase rapidly."

More than 66 per cent of the Gulf's 38 million people are below the age of 30, he said, which creates an opportunity for the automotive market going forward.

"The inflation in GCC is starting to cool down with the effect of weak Euro and so on," he added.

"The economy of US and Europe is expected to hit the bottom and make a recovery in the second half of 2009 due to the massive provisions of each government."

Sakaguchi said, his company is not planning any lay-offs, among its global workforce of 200,000. "We are cutting costs. But no job cuts are being considered. However, bonuses will be cut. We are targeting to make the company profitable even at 7 million unit production level," he said.

"In our growth strategy, we continued to focus on the emerging markets, such as Brazil, Russia, India, China as well as the Middle East, while most carmakers were focusing on the Western markets."