Saudi Arabia could see first drop in car imports in 10 years

Saudi Arabia, one of the Middle East's biggest car markets, could see the first drop in car imports in 10 years in 2009 as the financial crisis hits the oil-based economy, said analysts and traders.

The industry, whose 2008 sales accounted for about three per cent of the biggest Arab economy's gross domestic product, is cutting costs by freezing new recruitment, while banks are making access to financing harder, said industry experts.

Global auto manufacturers hope Gulf states will show relative resilience to the global downturn hitting the industry. The Saudi Government has boosted spending to counter the effects of the crisis, but the private sector is widely expected to suffer, mainly from greater caution by banks towards lending.