Dubai: There is more to the UAE’s automotive market than the fact that it will sell more than 300,000 units this year and that it is in line for another 18-25 per cent growth in 2014.
The UAE ranks among the top global markets for Rolls-Royce and taking on the rival claims of China or the US, and in fact it sells the most number of Bentleys in the world. Range Rover demand has run consistently high through the years and could see a further spurt from the current-generation model.
And it seems that carmakers just need to show off a concept vehicle for UAE buyers to put in their confirmed interest. The McLaren P1 (now in full production mode) went on Gulf roadshow with its concept model last year and had quite a few putting up the signing amounts to be among the first to receive the hybrid sportscar. At the time, it was not even decided by the manufacturer and the importer what the showroom price in the UAE would eventually be.
There was a similar response to the first Bentley SUV, which will actually roll off the assembly line in late 2015.
Clearly, the UAE’s auto sector is punching well above its weight. “The car market in Saudi Arabia is the largest [Gulf] market generally at about twice the size of the UAE,” Robin Colgan, regional managing director at Jaguar Land Rover. “However, the UAE is close to twice the size of Saudi Arabia when it comes to the luxury car market.”
Even volume brands are putting on a show — Mitsubishi’s importer sells more units than its counterparts anywhere else. “Post-recession, the UAE’s auto sector was the fastest to get back into a high-growth trajectory,” said Karl Hamer, managing director at Al Habtoor Motors. “A lot of time was spent on restructuring the business processes in the first two years of the recession and the intention was to make it as customer-centred as possible. The numbers since 2012 attest to the changes that were made in 2009-11.”
Auto sales are estimated to have crossed 300,000 units last year and is all set for a repeat in this one. But the only other time that these numbers were touched was in 2008, when it hit around 325,000 units. But can the high double-digit growth rates be maintained? Will 300,000 units a year now be the base level for auto sales in the UAE?
“The momentum can be maintained because a lot is happening that can only be favourable for auto retail,” said K. Rajaram, CEO of Al Nabooda Automobiles. “There are more people coming into the country as residents and that immediately widens the auto industry’s base. Plus, there’s an economy that’s on the up which feeds demand for fleet sales.
“When retail and corporate buyers are active, that’s a perfect storm for any auto market — the UAE’s in that position now.
“For dealerships, it will be about getting marketshare from someone else... and that’s how growth rates will be sustained.”
