Car dealers reported strong sales growth across the Emirates in the first half of the year, despite changes to Central Bank rules making it more difficult for buyers to secure car finance.
For the first half of the year, Ford, General Motors, BMW, Al-Futtaim Motors, which distributes Toyota, and Nissan and Renault all experienced double-digit growth in sales compared with the same period last year.
"Our retail sales are well up this year versus last year, by about 20 per cent," said Felix Welch, the director of sales and marketing at Arabian Automobiles, the exclusive dealer for Nissan in Dubai and the Northern Emirates.
Ford posted gains of 63 per cent in the Middle East for the first half of the year, with UAE sales up 30 per cent on the same period last year. The Ford Taurus, Fusion and Mustang recorded significant growth across all GCC markets, with the Taurus the most popular model, increasing 163 per cent during the first half of the year.
Larry Prein, the managing director for Ford in the region, said sales had been unaffected by the Central Bank's decision in May to require a 20 per cent deposit on all car loans.
"We are not concerned, it's a non-story right now," he said.
Many other manufacturers and dealers disagreed that the rules have had little or no effect, conceding that sales in May and last month slowed notably compared with the first four months of the year.
The Abu Dhabi and Dubai Chambers of Commerce have been lobbying the Central Bank to change the rules, which were introduced to strengthen the banking industry and shield it from bad loans.
"I cannot see it not having an impact on people," Mr Welch said. "It's definitely dampening consumers' ability to buy."
He said there had also been fewer consumers in the showrooms last month as people were waiting to see what deals were available during Ramadan.
Honda, which has also been affected by March's earthquake and tsunami in Japan, said the Central Bank rules had exacerbated an already difficult quarter.
"Supply is coming back, but we expect flat sales for 2011," said Mark Kass, the managing director of Al-Futtaim Motors' Honda unit.
Hugh Dickerson, the sales and marketing director at its Toyota unit, the market leader in the UAE, said demand for cars had outstripped supply during the first half of the year due to the effect of the Japanese disasters.
"We have continued the strong growth seen in the first quarter. We are well above where we were last year, in double digits," he said. "I'm absolutely certain that without the earthquake and tsunami we would have continued to see growth at the same rate as the first quarter."
General Motors (GM) reported total sales of 67,624 vehicles in the first half, up 22 per cent compared with the same period last year.
US brands such as Ford and GM have been gaining ground in the past year on the traditionally popular brands from the Far East.
GM's retail sales - purchases made by individual customers - rose by 54 per cent and represented 71 per cent of total sales.
Renault is also a brand growing rapidly in the Middle East, selling 4,300 cars in the first half, up 256 per cent on the same period last year. BMW sold 9,134 cars in the first six months of the year across the Emirates, a 13 per cent increase.
rjones@thenational.ae
Ten tax points to be aware of in 2026
1. Domestic VAT refund amendments: request your refund within five years
If a business does not apply for the refund on time, they lose their credit.
2. E-invoicing in the UAE
Businesses should continue preparing for the implementation of e-invoicing in the UAE, with 2026 a preparation and transition period ahead of phased mandatory adoption.
3. More tax audits
Tax authorities are increasingly using data already available across multiple filings to identify audit risks.
4. More beneficial VAT and excise tax penalty regime
Tax disputes are expected to become more frequent and more structured, with clearer administrative objection and appeal processes. The UAE has adopted a new penalty regime for VAT and excise disputes, which now mirrors the penalty regime for corporate tax.
5. Greater emphasis on statutory audit
There is a greater need for the accuracy of financial statements. The International Financial Reporting Standards standards need to be strictly adhered to and, as a result, the quality of the audits will need to increase.
6. Further transfer pricing enforcement
Transfer pricing enforcement, which refers to the practice of establishing prices for internal transactions between related entities, is expected to broaden in scope. The UAE will shortly open the possibility to negotiate advance pricing agreements, or essentially rulings for transfer pricing purposes.
7. Limited time periods for audits
Recent amendments also introduce a default five-year limitation period for tax audits and assessments, subject to specific statutory exceptions. While the standard audit and assessment period is five years, this may be extended to up to 15 years in cases involving fraud or tax evasion.
8. Pillar 2 implementation
Many multinational groups will begin to feel the practical effect of the Domestic Minimum Top-Up Tax (DMTT), the UAE's implementation of the OECD’s global minimum tax under Pillar 2. While the rules apply for financial years starting on or after January 1, 2025, it is 2026 that marks the transition to an operational phase.
9. Reduced compliance obligations for imported goods and services
Businesses that apply the reverse-charge mechanism for VAT purposes in the UAE may benefit from reduced compliance obligations.
10. Substance and CbC reporting focus
Tax authorities are expected to continue strengthening the enforcement of economic substance and Country-by-Country (CbC) reporting frameworks. In the UAE, these regimes are increasingly being used as risk-assessment tools, providing tax authorities with a comprehensive view of multinational groups’ global footprints and enabling them to assess whether profits are aligned with real economic activity.
Contributed by Thomas Vanhee and Hend Rashwan, Aurifer
Tonight's Chat on The National
Tonight's Chat is a series of online conversations on The National. The series features a diverse range of celebrities, politicians and business leaders from around the Arab world.
Tonight’s Chat host Ricardo Karam is a renowned author and broadcaster who has previously interviewed Bill Gates, Carlos Ghosn, Andre Agassi and the late Zaha Hadid, among others.
Intellectually curious and thought-provoking, Tonight’s Chat moves the conversation forward.
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