Toyota sales race to record in Middle East

Toyota sold 624,400 vehicles in the GCC last year - a 31 per cent increase on 2011. Jeffrey E Biteng / The National

Toyota sales have surged to a record high in the Middle East, rising by 33 per cent in the UAE alone.

That helped the Japanese company regain its position as the world's number one car maker and capped a bumper year for automotive sales across the Emirates.

Toyota sold 624,400 vehicles in the GCC last year - a 31 per cent increase on 2011. Middle East sales were also 31 per cent higher at a record 660,285 cars.

Car makers have reported double-digit growth in the UAE despite the introduction of Central Bank car loan limits two years ago.

"The economy is going very well and so purchasing power is high," said Nobuyuki Negishi, Toyota's chief representative for the Middle East and North Africa. "Lots of people are coming to the UAE, especially to Dubai and they require vehicles. The UAE market is showing a strong increase."

Toyota, historically the biggest car brand in the UAE, said that sales of its upscale Lexus brand were 50 per cent higher last year than in the previous year as the luxury market recovered and consumer confidence returned.

It also increased its regional market share to 43 per cent - about four per cent more than 2011.

"Now the market is back we expect sales growth of perhaps 10 per cent next year," Mr Negishi said.

Toyota is not alone in notching up record car sales in the UAE as the Japanese manufacturer's figures come just days after Korean rival Hyundai revealed a similarly robust performance.

The UAE accounted for Hyundai's second best Middle East sales last year with a record 66 per cent increase to 20,031 cars. Kuwait enjoyed even greater growth with sales up 80 per cent to 10,828 vehicles while Saudi Arabia remained the biggest market in the region for Hyundai with sales of 123,796 units, an increase of 15 per cent on the prior year.

The big advance in the region, and in particular the UAE, has led Hyundai to seek a bigger footprint by targeting bulk sales to taxi fleets in Dubai, Sharjah and Abu Dhabi, a market currently dominated by Toyota.

Mike Lee, the marketing manager for Hyundai Middle East, said: "As everyone knows, Toyota currently dominates the taxi market in the UAE, but we want to enter with Sonata. Supporting our local retail partner, Juma Al Majid, these first steps have already been taken. We have provided around 1,000 Sonatas to the RTA for its Dubai taxi fleet, and around 100 units in Sharjah for its taxi fleet."

Mr Lee added that the company was currently in discussions with both bodies about increasing those numbers. "We are also actively looking at opportunities to enter the Abu Dhabi taxi market and have entered into conversations about this," he said.

Entering the taxi market is viewed by Hyundai as a marketing tool rather than simply a way to increase sales.

"For Hyundai, entering the taxi market in the UAE, a key market, is not just about sales, but equally it represents an opportunity to increase brand awareness and educate potential customers about Hyundai."

Other car makers have also reported strong growth in the UAE and Middle East. Earlier this month Ford reported a 10 per cent sales growth in the region and a 55 per cent sales growth in the UAE alone. German car giant Audi reported a 16.4 per cent growth in car sales in the region last year. General Motors, Kia and Nissan have also reported surging sales in the country on the back of new financing options and a growth in demand.

"Basically these figures are down to a recovery in the economy. People are spending again," said Callum Knox, an account manager at Autodata Middle East, a market analyst. "There was a natural organic growth in sales last year of about 30 per cent in the UAE with sales of around 300,000."

Mr Knox said that sales volumes had increased across all sectors of the market and that recently imposed rules imposed by the Central Bank restricting lending on car purchases were not dampening demand.

"Expats are coming to the UAE again and people need a car. It's cheaper to buy than rent in the long term and people are clearly feeling more secure in their jobs than they did a year ago," he added.

"Luxury car brands are on the rise, but everything is selling across the board. People that have money are happy to spend and those that don't have money will borrow. Most manufacturers are back to 2007 or 2008 levels of sales figures."

Globally, too, the maker of the Corolla and the Prius cruised to a record sales total of 8.7 million cars across its Toyota and Lexus brands - a year on year increase of 23 per cent. And 2012 was the first year the company sold more than a million hybrid vehicles.

Earlier this year, Toyota regained its title as the world's top selling car maker, beating rivals Volkswagen and GM.

* with additional reporting by James Doran