Even as UAE leads the Arab countries in average car sales growth, the recent Central Bank regulations for new automobile loans has impacted car sales in the country.
Sales of new cars in the UAE have fallen by 20 per cent after the new regulation came into effect, local media reports. Several top car dealers in the country have also reported a steep drop in sales since May when the Central Bank stipulations first kicked in.
Top officials at Al Habtoor Motors, dealers of Mitsubishi, confirmed that car sales sunk in the last two months by about 25%. Pertinently individual buyers have been at the receiving end of the 20% down payment rule because they can ill afford to pay the amount.
“The company will continue to create new offers to improve sales of their automobiles similar to the one recently launched, which allows customers to pay low monthly premiums, with the possibility of replacing their car with a new one every two years," Hugh Dickerson, Senior General Manager of Al Futtaim Motors, dealers of Toyota in the UAE said.
Sultan bin Nasser Al Suwaidi, the Central Bank Governor, has held a meeting with the Dubai Chamber of Commerce and Industry on the new regulation recently.
Pertinently a recent survey by Business Monitor International 2011 predicts a growth in the sale of cars in the UAE in 2011. UAE led regional countries in average sales growth as it recorded a double-digit growth rate in the first quarter compared to the same period last year.
In light of these developments it remains to be seen how the auto market shapes up over the next few months.