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Car Sales Dip 6 Per Cent

“The overall sales of automobile industry during the period January –September 2008 was fabulous, with sales soaring 34.4 per cent in the UAE, comparing with 20 per cent in the GCC,” said Bennani Mohammed, managing director Renault GCC, while speaking to Khaleej Times, on the sidelines of Abu Dhabi Motor Show, Wednesday evening.

Mohammed believed that since banks have become picky on customers, the car financing has been a problem now.

The banks have created several obstacles by increasing the interest rates from an average of 3-4 per cent to 5-6 per cent; doubling the down payment to 20 per cent; and accepting applications from customers with five digit salaries only.

Renault GCC managing director said that car financing provided by banks and financial institutions contribute 60 per cent to the automobile sales for passenger as well as commercial vehicles in the UAE. “The automobile dealers started receiving negative feedback from customers in the month of September in Saudi Arabia, in the UAE things were not as bad until recently, when several restrictions were imposed thereby discouraging customers to book vehicles,” he added.

S.K.Ahmad, business development manager at Al Majid Motors, UAE dealers for KIA Motors said the real impact of credit restrictions imposed by financial institutions will be realised in the first quarter of year 2009, with more figures available.

Giving his outlook for the overall automobile industry sales in the UAE in the year 2009, Renault GCC boss said that he would be very happy if automobile dealers are able to sale as much vehicles as they sold in 2008.“

And it would be a miracle if they manage to sale more vehicles than 2008”, he said. S.K.Ahmad said that the situation in the automobile market turned murky after a very ‘good year’in October when banks started rejecting car financing applications.“So, now there are hundreds of vehicles from all brands and makes piled up in the nation’s market,” he said. Bennani Mohammed said that he does not see automobile prices reducing in the next year, as sales goes down.