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Easy Financing to Boost Car Sales in the UAE
Oct 05, 2009

UAE’s car sales is projected to go up by 5% in 2010 as banks have once again started granting easy auto loans with improving economy.
 
According to a new research by Dubai Chamber of Commerce & Industry (DCCI), despite the launch of the Dubai Metro, car sales in the UAE are anticipated to surge by 5% in 2010, as banks have resumed lending with the lessening impact of the global recession, reported Arabian Business.
 
In spite of the strong efforts being made by the Roads and Transport Authority to promote alternative means of transport, DCCI’s analysis predicted that car ownership in the UAE will surpass 55% of the population in 2009, which will be for the first time in the history of the country. The transport chiefs of the country are hoping that the launch of metro will draw 30% of the Dubai’s population to go for public transport by 2020.
 
The DCCI’s report states that car dealers in the UAE are positive on the outlook for the latter half of the current year. They are quite confident that their sales will surge, though at a lower rate, in what appears to be a challenging year in wake of financial crisis.
 
DCCI however noted that the growth prospects for the industry in the short-term are not much encouraging, as any decline in job opportunities is expected to lead to a drastic curtailing of immigration. But at the same time, it has forecast that the sales growth will gain pace in 2010 with the economic recovery and improving credit conditions.
 
Besides this, the combination of relatively high living standard and revival in oil prices, which are now hovering at US$65p/b, will continue driving the growth in the UAE’s automobile sector in the coming years.
 
As the country is not having a sizable domestic automobile manufacturing capability, there exists a huge market for automobile imports in the UAE. High national wealth of the country has resulted in a niche market for sales of imported vehicles.
 
According to a Research Analyst at RNCOS, “Caution exercised by banks in lending auto loans in wake of gloomy economic environment affected the automotive sector in the UAE. But now, with the country heading ahead on the path of economic recovery, banks are once again becoming more flexible as far as auto financing is concerned. This, will certainly boost the demand, increase sales and ultimately benefit the auto industry.”
 
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