Mother-of pearl dashboards and diamond-encrusted hood ornaments at the Dubai International Motor Show last week underlined how the safe-haven status of the UAE is fuelling dramatic growth in sales of luxury cars.
This year's Arab Spring boosted sales in the UAE. Companies and individuals from around the region looked for a safe haven in Dubai.
"The uprisings...have provided confidence that Dubai is important from a security point of view," said Michel Ayat, chief executive of AW Rostamani Automotive, which sells Nissan's luxury Infiniti models.
With Brent oil prices above $100 a barrel, promising continued economic growth for the UAE, a debt crisis in Europe and financial stormclouds in the US have also largely failed to deter wealthy consumers. The UAE economy is expected by analysts to grow about 3.8 per cent this year.
"The crisis is everywhere. [But] even if the local has nothing to eat, that's no problem if he has a luxury car," joked Emirati businessman Salem Seif, 28, eyeing a new Porsche Cayenne sport utility vehicle at the show.
Porsche in Dubai sold 211 new cars in August, the best-ever performance for any Porsche showroom globally, with the Cayenne remaining the brand's top seller. Sales for the first eight months of this year are up 46 per cent from a year earlier, said Vijay Rao, the showroom's general manager.
In the UAE, the Gulf's largest market for luxury cars, total sales are expected to jump 32 per cent to 25,010 this year after a 16 per cent rise in 2010, consultants IHS Automotive forecast.
That would be the fastest growth in the Gulf and exceed volumes seen in the oil-boom years before 2008, when access to credit was easier.
Luxury cars account for nine per cent of the country's car sales.
And many of them are being bought by young customers just getting a taste for such vehicles; about 66 per cent of all new car purchases in the UAE, which has the world's sixth highest per capita income at over $47,000, are made by customers between the ages of 18 and 29, according to Business Monitor International.
Ayat estimated the luxury segment of the UAE car market would grow around 15 per cent next year, but that is more optimistic than the eight per cent growth forecast by IHS.
Gulf car sales data are not available on an aggregate basis, posing a challenge to industry forecasters.
Overall, UAE passenger car sales of all types are expected to rise 15 per cent to 273,924 this year and climb a further 13 per cent in 2012, after a six per cent increase last year, IHS said.
Even if growth in the luxury market does slow, the top-end brands such as Rolls-Royce, which sells cars priced above $270,000 mainly to royalty and expatriate entrepreneurs, may see little impact.
"In the third quarter this year, with the problems in the Eurozone, the market slowed down a little, but let's emphasise that we will still continue to see growth in the market compared to 2010," said James Crichton, Rolls-Royce Motor Cars' regional director for the Middle East and Africa.
"In the UAE, we are up 78 per cent this year, and in Saudi Arabia we are up almost 60 per cent," he said at the motor show, where the automaker displayed its blue and white ‘Riviera Phantom' with the iconic flying lady figurine, covered in 2,300 diamonds, perched on its brushed stainless steel bonnet.
Home to some 5.4 million people, the UAE is the world's fourth-largest market for Rolls-Royce.
"There is a crisis and tension around the globe but people who are luxury spenders by nature, they will continue to spend," said Adham Charanoglu, chief executive of Aston Martin Middle East and North Africa.
This is completely separate from the retail market," he said at the launch of the $530,000 Aston Martin Zagato in Dubai.
Car sales trends diverged in the Gulf in 2011. In Bahrain, luxury car sales are projected to fall 19 per cent this year before rebounding 20 per cent next year, IHS said.
Saudi Arabia is forecast to see a four per cent drop in high-end sales this year before growth takes off strongly — at a 24 per cent clip — in 2012. That would far exceed the 8 per cent rise predicted for overall Saudi car sales next year.
Dealers see potential for further growth if the kingdom eventually allows women to drive. In September the government decided to let women vote in municipal elections, a step which could presage further social change.
"In Saudi Arabia, 20 per cent of our customers are women, and the number is increasing," said Umberto Cini, managing director at Maserati Middle East and Africa. At present, women are driven by relatives or chauffeurs.