Car inventories pile up

A fall in new car shipments into Abu Dhabi, and reports of car inventories piling up elsewhere in the UAE, could be a sign of the global downturn hitting the economy.
Analysts say car rental agencies are feeling the bite from the slowdown in tourist arrivals, while the Government, normally a large purchaser of vehicles, has similarly cut back spending. A potential population decline in Dubai and continuing tight credit markets for car loans are also considered factors.

Car imports at Abu Dhabi’s main port, Mina Zayed, fell 12 per cent in the first quarter, from 18,046 to 15,866 vehicles over the same period a year ago, according to its operator, Abu Dhabi Terminals. The drop is a sharp reversal from last year, when brimming optimism about the Gulf region and the high price of oil led dealerships to bring in 92,944 vehicles, a 27 per cent rise from 2007. Car imports “are being hit hard because of the financial situation”, said Mohammed al Mannaei, the chief executive of Abu Dhabi Terminals.

Ramzi Razian, a car industry consultant based in Dubai, said dealers were probably reluctant to order more cars after seeing sales weaken in the past six months. Inventories had accumulated from previous shipments to such an extent that there were thousands of vehicles at Jebel Ali port, he said. Officials from DP World, which manages Abu Dhabi Terminals, declined to comment.