If the new and used car markets were depressed in June then July was even worse. “The market is on its knees” is how one contact described the level of trading for the month. We have received feedback of new car sales being down between 30-50%. In view of the above, the industry will need to monitor the level of new car sales very carefully, because the long term issue is that there will be fewer cars available for the used car market.

This point is one that always gets overlooked. The plain and simple truth is, if you sell less new cars, then, the next year there are less one year old cars for the used car market. The year after that, less two year old cars etc. This will then result in a rise in the value of these cars. It is simple supply and demand logic.
The only thing that will prevent

this is if the financing situation changes and there is new car stock available. However, amongst all the wailing and moaning we are being told that a large number of companies are still searching for stock! So, it would seem that the industry is confident that the market will have its usual boom at the end of Ramadan. We are not so sure. Are consumers suddenly going to find the 20% deposit? If so, where from?
It could be an interesting time ahead.

Bill Carter
Head of Valuations.
Autodata Middle East.
Email: bcarter@autodata.ae

Bill Carter (1952) is head of the Valuations Department at Autodata Middle East. Bill has been working in the automotive industry for 42 years, among which 16 years for Glasses Guide. The last three years Bill analyzed the new and used car market in the United Arab Emirates.