The UAE’s automobile sector is steadily shifting gears to pick up speed and is likely to reach 2019 level in 2022 or a year later after slumping 30 per cent this year, say industry executives.
Hit by the lockdown, after the outbreak of Covid-19 in the first and second quarter of 2020, new car sales in the UAE started picking up after the summer and has been rising steadily since then.
Axel Dreyer, CEO of Galadari Automobiles, distributor of Mazda vehicles in the UAE, said a shortfall of more than 30 per cent in 2020 automotive market cannot be compensated within one year, especially considering that the impact of Covid-19 will continue in 2021.
“We are already witnessing, in the last two months, an increase in business activities. We are looking forward towards this positive trend continuing in 2021, especially considering the big stimulus package that has been released from the government recently. I’m expecting a growth of the automotive market between five to 10 per cent in 2021,” he said.
Dreyer noted that a recovery back to 2019 level can be expected in 2022 or 2023.
Vincent Peter Wijnen, senior managing director for UAE at Al-Futtaim Automotive, said the UAE auto market started bouncing back after the summer and is steadily growing every month.
“But it is still below 2019 level, although the gap is closing now. We don’t think the market will get back to 2019 level in 2021. Achieving the 2019 level will take another a year probably, perhaps in 2022. Because 2019 was very high in terms of volumes, the drop was quite steep,” Wijnen said, adding that the car market dropped by about 30 per cent this year, mainly because there were a couple of months when there was a complete lockdown.
“When you look at November-December, we might be 10 -15 per cent lower than 2019,” Wijnen said on the sidelines of the launch of new Lexus LC Convertibles in the UAE.
2020 Inventory Healthy
Wijnen said Al Futtaim Group, which is the distributor for some of the world’s largest brands such as Toyota, Lexus, Honda etc., managed its stocks quite well.
“We acted very quickly when situation went down and minimised the inflow of new cars. All of our brands’ stock levels are healthy. We also restarted ordering cars the moment we saw the market picking up. We made sure that we got cars. Some other GCC markets didn’t react quickly and suffered shortages because their sales bounced back,” Wijnen said.
Meanwhile, Dreyer believes that all brands launched attractive tactical campaigns throughout the year to reduce 2020 inventory level.
“Many brands already launched 2021 models which indicated that 2020 inventory levels were manageable. We at Galadari Mazda have successfully managed our stocks and already launched our 2021 models,” Dreyer concluded.
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