The introduction of the new car finance rules by the UAE Central Bank certainly had a serious impact on the automotive industry, and especially the sales!
Most of our market contacts are reporting a drop off in showroom traffic and an even bigger drop in sales due to the customer not being able to meet the new deposit requirements.
“Sales have fallen off of a cliff” was one quote I received!
One bright note in this doom and gloom is that the premium brands are still managing to sell as the customers who are visiting are not ‘tyre kickers’ but genuine buyers with the ability to meet the finance requirements.
Indeed, some brands are reporting used car stock levels are low and are actively trying to source units to meet demand. |
Some are also reporting good levels of orders for new cars, so at least some manufacturers are bucking the trend.
It will be interesting to see what happens during the latter part of August as Ramadan Ends. This is usually a busy time for the car showrooms and generates some serious income. Will this still be a good period with the current finance restrictions?
Only time will tell…!
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. |
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The Dealer Council
Autodata is pleased to announce the introduction of the Dealer Council. From September 2011 onwards we will organize monthly breakfast meetings to facilitate open discussions and exchange of ideas between senior managers in the Automotive Industry. With this initiative we are responding to the requests that we, as an independent expert in used car data, have received from the market. Would you like to participate and represent your company in the Council? Please send your contact details via email to
register@autodata.ae.
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The TrendThe above chart shows the current values for the Nissan Altima depending on its model year. As we can see there is a large drop in residual value for the 2007 model year. This is due to there being a change in model with a new version available for 2008. This effect is normal for all makes and models when a new version is introduced. In some instances there can actually be an increase in value for the outgoing model when a new version is introduced. This is usually caused by supply restrictions on the new version and will only last for a few months.
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In Numbers Anybody who thinks that all cars depreciate at the same rate and by the same amount should take a good look at the chart. These are 4 of the more popular cars in the UAE. If you look at Car 1 you will see that its value has gone up for the month of June . This is because of market demand outstripping supply. Car 2 has the problem that a new version has just been released at a lower price. Clearly, this is a dynamic market and proves why the Autodata Car Guide is so popular in the industry.
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