Magazine article The Middle East

Where the Money Goes: The Sale of Luxuries Is Often a Good Parker of How an Economy Is Faring, since They Are Usually the First to Be Sacrificed When Belts Have to Be Tightened

Magazine article The Middle East

Where the Money Goes: The Sale of Luxuries Is Often a Good Parker of How an Economy Is Faring, since They Are Usually the First to Be Sacrificed When Belts Have to Be Tightened

Article excerpt

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Saudi Arabia, traditionally the strongest market for luxury cars, still accounts for 50% of the region's car sales, with a large proportion of those sales belonging to the high-end market. The kingdom's rapid rise in population, and restrictions on the age of imported used cars, have helped keep the sector healthy, as have its typical weather conditions, which are hard on cars.

This October's EXCS Exotic Cars Exhibition, held in Riyadh, boasted 70 cars with a combined value of $16m, compared to less than $10m the previous year, as luxury-car makers from all over the world turned to the region to keep them going while other markets slump.

The situation in the UAE is slightly different. The property crash has seen many expatriate workers lose their jobs, and this has affected the sales of luxury cars there. Of the UAE's population, 80% are expatriate workers and they may only reside there if employed. This downturn saw used luxury cars flooding the market, as people on commission-based salaries who became unemployed started selling their expensive cars for cash as they had to leave the country.

Dubai's property slump has hit the emirate's luxury car market hard. New car prices have fallen dramatically as easy credit has dried up, and used-car forecourts have plenty of reduced-price cars for sale but few customers. Dealers in Dubai estimate their business has dropped by 50% in just one year.

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But the rush of car owners making quick sales has slowed, and banks are beginning to lend again, so there is hope that the market, which has had it so good for so long, will begin to show signs of recovery before the end of the year.

Kuwait has for a number of years been a fertile market for the world's luxury-car manufacturers. Its still-high GDP is preventing the luxury-car market there from contracting, though its projected rate of growth is modest compared to last year. In the low- to midrange car market, customers want reliability, good fuel economy and good deals, but at the very high end of the luxury-car market, what customers want most of all is whatever is new. For this reason, car manufacturers are relentlessly pushing new models to turn the heads of their wealthiest customers.

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The Indian-owned Jaguar manufacturer, already a popular marque in the region, has just announced its latest models: the 2010 XF and the XFR. The Middle East is already a vital market for the company, whose Dubai's dealership has sold more units than any other in the world for the second year running, and they hope to build on the success the award-winning XF range has already enjoyed.

Robin Colgan, managing director of Jaguar Middle East and North Africa, believes the car holds true to Jaguar's philosophy of 'beauty, style and exhilarating performance'. …

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