General Motors Corp's Middle East sales fell 19 percent in the first quarter as customers struggled to secure car loans due to tighter lending restrictions at banks, GM's regional president said on Sunday,
Yet, while GM could face bankruptcy in the United States, its regional operation plans to introduce new car brands this year to help boost market share from about 13 percent now, said Mike Devereux, president of GM's Middle East Operations.
"There are a lot of people who walk into showrooms who aren't able to buy because they can't get financing," Devereux told Reuters in an interview.
Overall auto sales in the region fell 21 percent in the first three months of the year compared with the year-earlier period, GM said, citing data compiled by a group of major car manufacturers that operate in the region.
"The availability of banks to lend our distributors money and the consumer money continues to be an area of concern for us. However, and we've been saying this for four or five weeks now, we're seeing signs of that easing," Devereux said.
The US automaker has been working with banks in the Middle East to help consumers secure access to car loans, by assisting with down payments of up to 15,000 dirhams ($4,084), he said.
"We will be profitable this year too, but much less so than last year," Devereux added. GM sold 144,485 units in the region last year.
Devereux said restructuring of GM in the United States, where the automaker is surviving on $15.4 billion of government loans it received since the start of the year, would not stand in the way of regional expansion.
GM, which last week reported a 34 percent decline in April US auto sales, could file for bankruptcy if bondholders do not accept a debt-for-equity exchange offer that would give them 10 percent ownership of a restructured automaker.
"We are matching our expenditure and revenues here to what the business conditions in the Middle East are. Our focus is not on the United States," Devereux said. The automaker laid off 12 people, or around 10 percent of its Middle East staff, in February.
GM planned to introduce a number of models to the region this year, including the Chevrolet Cruze in the next two to three months, the Chevrolet Malibu in the third or fourth quarter, and the GMC Terrain in the fourth quarter, he said.
It would also launch the Chevrolet Camaro within 10 days.
"Our market share is stable and we see it growing on the back of product launches," Devereux said.
He said market share stood at 12 to 13.5 percent in the Middle East, which includes the Gulf Arab oil exporters, as well as Syria, Yemen, Lebanon, Iraq and Jordan.
GM, meanwhile, expected to conclude talks soon to sell its Hummer brand, he said. Gulf Arab investors had previously expressed interest in Hummer.
"There are a number of very, very interested parties in the Hummer brand, and it's likely we will conclude negotiations with one of them in the near future," said Devereux, who is not involved in the talks and said he did not know the identity of the investors.
"The Hummer brand is an extremely valuable brand, particularly for this part of the world, because people like to go off-roading," he said.
In March, Abu Dhabi's International Petroleum Investment Company bought a 9.1 percent stake in Daimler AG. (Reuters)For all the latest transport news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.
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