By Andy Sambidge
New report also says early shoots of recovery seen in auto sector during Q4 2009.
Car sales in the UAE, which have been hit hard by the impact of the global economic crisis, are seen exceeding 2008 peaks within five years, a new report has said.
By 2014, automobile sales in the country are predicted to have fully recovered to more than 440,000 units per year, more than previous highs experienced prior to the start of the financial downturn.
In its latest UAE Autos report, Business Monitor International said it had revised its forecast for 2009 sales to "reflect the early shoots of recovery".
The global research company said it was now expecting car sales in the UAE to contract by five percent in 2009, compared to a previous forecast of a 8.5 percent decline.
Analysts added that they expected sales to stabilise in 2010 and for growth "to pick up in the medium term".
The report added: "The global economic downturn, along with a credit freeze, has sent the autos market reeling in the UAE...While financing still remains difficult to come by, there are signs that credit is trickling down very slowly to the consumer level."
However it warned: "It will be some time before the heady days of credit-fuelled buying return - if ever."
BMI said anecdotal evidence suggested that consumers were paying cash for vehicles as piles of unsold stock create a buyer's market for cars.
Although the UAE is regarded as a major destination for luxury cars, BMI said the budget car market was also growing "as many more buyers are becoming cost conscious amid the global economic downturn".
BMI added that an area of concern for the UAE auto sector was a struggling second hand market which, it said, had been hit by a "sharp downturn in re-exports" due to lack of demand from traditional destinations such as Saudi Arabia and Africa.
Five percent decline compared to when? It doesnâ€™t add up, not even an 8.5% decline. There is no credit for the majority of the population. In 2008 people with an income as little as 3000 Dirham could get a car loan. All that is gone since end of 2008. How can it be only 5% decline? How can a 5% decline â€œsend the auto market reeling in the UAEâ€?
Dan, You are 100% correct in your assessment. These BMI analysts do not appear to ever question their own findings and compare them to the real economic situation. They just print what they 'think' is correct and what they want people to see/hear never ever expecting people to question their reports. Their reports make no economic sense, as you pointed out, and neither do thier projections. Obviously their projections assume a strong economic recovery within 3-5yrs (which won't/can't happen) and at the end of it all they expect all 'criteria' that drove 2008 sales figures to be back in place...which is again impossiple. I sometimes wish we could put our points to the authors of these reports and have them counter our arguements. That again will never happen because these reports are put out for the sake of PR consumption and not for an intelligent questioning readership.