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UAE auto sales zoom near record territory

Dubai: Auto sales in the UAE are in line to record its best performance ever by topping the 350,000 units mark this year and erasing the earlier record set in 2008. While retail sales have been consistently high all through the year, recent weeks have seen major fleet orders and thus raising full-year expectations.

The auto market is also hopeful that prospective buyers will take a decision now when financing rates are still on the lower side. (There could be some firm up in base rates by early next year, according to some industry forecasts.) It is no coincidence then that major dealerships and banks have been aggressively touting special financing offers in recent days.

“The last two years provided enough proof that UAE auto sales were headed back into record-setting territory,” said Salah Yamout, sales and marketing director, Arabian Automobiles. “At the moment, the completed sales and pointers for the coming weeks indicate that the 2008 high-water mark will be breached.”

Some of the models unveiled at the Dubai International Motor Show can also help with the volumes. There is the new Toyota Corolla, destined to be an instant bestseller, while Mitsubishi has an eye on the growing local user base for hatchbacks with the 1.2-litre, three-cylinder Mirage.

At many dealerships, fleet sales — to hotels, tour operators, limousine service providers, real estate agents and the big corporate deals — are running neck and neck with retail. This, in fact, is leading the sales surge at the moment. With a little help from Dubai’s confirmation as the Expo 2020 host city, fleet sales can turn it on further.

“Big dealerships are now focusing heavily in getting orders from small and mid-sized businesses, through special packages,” said Yamout.

At Juma Al Majid — Hyundai, Tamer Al Hakeem, general manager for marketing, is spinning his own plan to get the South Korean brand wider acceptance with fleet buyers. And it is never about the selling price.

“For a clientele such as SMEs, the decision is often decided on a model’s resale value,” said Al Hakeem. “For them it’s a major investment commitment and they need to be assured that the residual value will hold up.

“With Hyundai, we have been developing a new cost of ownership programme to enhance the resale value — the results will show up significantly in 2014.

“But a lot hinge on the Expo 2020 decision — as with every other sector, there will be no holding back the automotive industry if the decision is in favour of Dubai.”