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UAE, light vehicles market in 2017

2
Jan

UAE, light vehicles market in 2017

Across the board, auto dealers have experienced declining sales with some forecasts expecting new car sales to drop over 15 per cent in 2017.

Based on KPMG’s interaction with auto dealers, it appears that the forecast for first quarter of 2018 is also not encouraging as customers will need some time to reconcile with the new normal VAT environment.

As part of the GCC-wide agreement, the UAE will impose five per cent VAT on new and used car purchases from January 1, 2018.

According to Auto data Middle East, new car sales are to be lower by 15 per cent this year as compared to last year. It is expect sales growth to remain stagnant next year as well.

But dealers expect a positive sales pick-up from the second quarter 2018 leading into 2019 and then Expo 2020 Dubai.

Another key auto trend is the introduction of electric versions in the market and it is expected this trend to continue. Government entities have recently announced a number of incentives to support electric vehicles and huge investments will be made towards building supportive infrastructure. Overall, a positive outlook is in the horizon from second half of 2018.

The automotive market is competitive by nature; however, prices haven’t changed. Instead, many offers have been built-in to the vehicle prices.

Source: KT