Auto sales in GCC have climbed in the second quarter of 2009

Car sales in the GCC region have picked up in the second quarter of 2009, continuing a trend which began to emerge in March, a new report from AutoMiddleEast.com has revealed.

As sales have climbed confidence is beginning to return among distributors whose expectations for the first half have been turned on their head, stated the AutoMiddleEast.com GCC automotive report, released recently.

General Motors Middle East, and Al Futtaim, the UAE's Toyota and Lexus distributor, led a line of motor majors queuing up to confirm news of recovery in the local industry to AutoMiddleEast.com. The trade commentator consulted the local auto sector's leading players in compiling its in depth report and discovered the region had bucked the global trend.

Pankaj Dev, AutoMiddleEast.com's Managing Director, said: 'Clearly, the worst of the downturn is over. Distributors are now in a positive frame of mind. There is confidence and optimism in the regional industry. The sentiment is: 'the situation is not without its difficulties but we are confident about the future'.'

AutoMiddleEast.com, the Dubai-based regional auto industry think-tank and independent analyst polled a number of automotive brands in each market segment to compile its report. It found disparities between the luxury end and the high volume mid market but was conclusive that overall the outlook is positive.

The report confirmed the underlying economic conditions, marked by reduced but improving liquidity, low consumer confidence levels and restricted access to credit, continues to pose challenges for auto distributors, although it insists the problems faced by manufacturers will have little impact in the regional market.

Dev said, 'The market has proved surprisingly resilient as distributors have proactively sought to look for new opportunities and ratcheted up marketing to chase market share.'

'There are clear indications that some of the leading players are determined to take advantage of the current climate to build for the future and their marketing campaigns reflect this. Buyers stand to benefit from this, both in the short and medium term as the dealers opt for turnover as their main priority,' he added.

The report confirmed that overall sales across the region will be down on 2008's first half but nowhere near the decline that might have been expected following the slow start to the year. Fadi Ghosn, the Chief Marketing Officer for GM Middle East and one of those interviewed for the survey, summed up the strength of the response from dealers which has been so effective in restoring confidence.

'GM dealers signed agreements with regional banks to help customers finance their vehicles, and launched some very exciting promotions that have helped increase showroom traffic and closing rates,' said Ghosn.

Hugh Dickerson, General Manager for sales and marketing for Al-Futtaim Motors, confirmed that his company too had started to see the benefits of promotional activities tied to credit boosting efforts launched earlier in the year.

He confirmed, 'Toyota and Lexus dealer in the UAE have reported that they have seen strong sales in response to a range of consumer offers put into place in January and February.'

Though the bottom line, confirmed by Ghosn, is that General Motors will see an overall fall in sales in the GCC and Levant from 1,150,000 in 2008 to around 850,000 units in 2009, the decline is appreciably below expectations at the turn of the year and gives the company considerable room to manoeuvre.

Ghosn supports the report's finding that the leading players agree the worst is already over. Ford, one of the major players in the region, stated in the report that Saudi Arabia, its strongest market, saw a 13% increase in sales during March while Kuwait and UAE sales rose by 12% and 4% respectively.

At the top end of the market, the premium vehicles agencies are positively bullish as they too chase market share. Audi, for example, is reported as being ahead of the trend and though overall sales are down on last year its share of its market tier has grown.

An Audi spokesman is reported as saying, 'Considering the current economic climate, that's a decent performance. We have slightly increased our market share. It is a tough time for the whole industry, but our outlook is very positive.'

It is the same story for Audi's main rivals. BMW, for example, saw its market share rise 2% in March even though overall its first quarter sales were 9% down on the comparable figure for the previous year. James Crichton, BMW Middle East's sales and marketing director, said the fall was in line with expectations.

This should not deflect attention from a genuine growth and success story for BMW in other parts of the region. The report showed that BMW sales in Lebanon and Syria leaped by more than 100% in the same period and the manufacturer's biggest market in the region, Saudi Arabia, saw a 15% increase in sales for the same period.

Jaguar bucked the downward trend in the first quarter and was able to return a 6% sales increase on the back of a determined market push.

Confirming that the luxury end of the market had been least affected, Daniel Redpath, Aston Martin's Middle East spokesman, confirmed demand for the new DBS Auto had maintained a healthy flow of business the UK manufacturer.

'The Middle East continues to perform well for us,' he said. 'We are approximately 20% up on the same period last year.'

The report showed confidence is high among the distributors. 'Our car launches so far this year, the Chevrolet Traverse, Cadillac Platinum Escalade and CTS-V, have all helped boost new vehicle sales,' said Ghosn. 'We'll be launching new promotions to increase sales and plan to increase our market share this year across all ME markets,' he said.

Dickerson said, 'We anticipate the growing sales we experienced over the first quarter to continue into the latter half of the year as our promotions offer the value for money consumers are looking for in the current economic period.'


The report confirmed that Galadari expects sales to pick up in the second half of the year and also plans a marketing push to improve customer confidence. It hopes to maintain Mazda's 2008 sales volume in 2009.

Ford is looking to its fleet business, its broad and up-to-date range of products and an attention to after sales service to see them through.

'While 2009 will continue to be a challenge for all industries, we are confident and excited about the year ahead as we have an excellent products portfolio,' said Mark Eedles. Jaguar recently launched new versions of its XK and XF, and the brand new XJ luxury saloon will be unveiled later this year.

While the slowdown has prompted a large number of manufacturers to think carefully about new product launches, there are still plenty of new vehicles to be released in 2009, the report confirmed.

It reported that BMW will launch the MINI Cabrio and the Z4 Roadster, as well as the hardcore versions of its popular SUVs - the X5M and the X6M.

Audi has several new models set to be launched throughout the year, including the R8 V10 supercar, which it believes will keep its profile high. It also has a spate of high profile activities planned to celebrate its 100th anniversary.

Daniel Redpath said, 'The plans for the brand and the business remain stronger than ever, with Aston Martin holding market share in key countries, expanding into new markets and introducing further new products this year.'

These include the V12 Vantage, the DBS Volante, the Rapide saloon and the ultra-exclusive One-77.

GM is getting ready to launch Chevrolet's global car, the Cruze and the Camaro muscle car over the course of the next few weeks. 'Later in the year, we will launch the new Cadillac SRX luxury crossover, the mid-sized Chevrolet Malibu and GMC Terrain crossover in Q4,' said Ghosn.

Mazda will launch an SUV in the last quarter of 2009, which it expects to be popular, and several smaller cars are planned for the start of 2010.

'There is no sign of a slowdown in the appetite for new products in the Gulf region,' said Dickerson. 'During the first quarter we successfully launched the biggest ever Toyota SUV, the Sequoia and the luxury SUV, the Lexus RX350. Both vehicles have performed exceedingly well and continue to contribute to our increasing sales figures. These were the first of several new vehicles that the Toyota and Lexus brands have scheduled for launch this year in the UAE.'

Lexus will shortly launch the IS300 Convertible, the report says.

Towards the end of the year, the region's biggest motorshow will take place in the UAE. The Dubai Motor Show is the year's best chance for manufacturers to show off their wares in the Middle East, and most of the carmakers interviewed for the report plan to attend. Mazda, GM and Ford confirmed their intention to exhibit, while Aston Martin intends to, though it has yet to confirm.

Dev added, 'There is genuine confidence in the market that the region will see out the downturn relatively unscathed. For the consumer, these are undoubtedly the best of times to buy a new car. Real price bargains and great value deals are there to be had.'

Source: www.ameinfo.com