UAE Vehicles Market in 2015 hit the new all time record, the second in a row ranking as the World’s 27th. However in the Q4 sales were reported heavily down as demand for re-export was hit by economic restrictions.
Economic Outlook
Against a backdrop of a drastic drop in oil prices, estimates from the Central Bank reflect that activity in non-oil activities helped to sustain growth in 2015. According to the Central Bank, the economy expanded 3.1% in 2015, which was below the 4.6% tallied in 2014 and, if confirmed, it will represent the weakest growth in five years.
Recent data suggest that the weaknesses observed in 2015 have likely carried into 2016. Although PMI in the non-oil private sector remained in positive territory in January, it hit the lowest level since 2010.
Moreover, a strong dirham, as a result of its peg to the U.S. dollar, is hurting the competitiveness of the UAE’s goods and services. On the upside, the country is expected to benefit the most from the implementation of Iran’s nuclear deal given the solid links between the two economies.
Market Outlook
The UAE is in a fortunate position to deal with the current low oil price environment, as the country succeeded in diversifying its economy away from oil and enjoys an enviable amount of foreign assets. Furthermore, the automotive industry is recent years was fueled by a dual strong demand, with domestic demand and strong export to Africa and Middle East.
The re-export of vehicles grew thanks to the favorable pricing conditions, with the lowest consumer price in the area, and cash availability to finance a business estimated in over 2 billion dollars per year.
Until September 2015 the market kept the growing pace apparently without any interference from the low oil price environment with a first half figures record up 14.8% from the previous year. In September the market was flat before dropping down a huge 50% in the last quarter, when 2016 Budget discussion disclosed Government plans to reduce several subsidies and increase taxes, with the introduction of VAT and a specific duty on vehicles.
In the full year, figures had been positive, with the new all time record scored at 424.208 units, up 2.9% from the previous. The country has lost one place in the global ranking, outpaced by Taiwan in 26th place.
The perspectives for the 2016 are now dark and almost uncertain, depending by the eventual introduction of Government measures.
Tables with sales figures
In the tables below we report sales for all Brands, top 10 Manufacturers Group and top 10 Models
