Since it was first produced in 1976, the Ford Fiesta has regularly topped bestseller charts because of its affordability, availability and reliability.
Yet, in an extraordinary twist, an automotive expert has told The National the previously ubiquitous model now comes with a 12-month wait in the UK.
Unsurprisingly, it is now nowhere near the UK top sellers list for 2022 to date. It's a far cry from the slogan of mass production pioneer Henry Ford, who promised buyers any car they wanted (as long as it was black).
"The longest lead times are now on the cheapest cars," said Steve Young, managing director of the International Car Distribution Programme.
Ford is not the only manufacturer whose forecourts are no longer crowded. Giant lots with rows of cars awaiting a willing buyer are a thing of the past. Motorists expecting to walk into any showroom and leave with a new car are likely to be sorely disappointed.
This remarkable situation doesn't have a single root cause. It is part of a seismic change in the global motor industry brought about by several factors, from supply shortages and environmental factors to war and changing consumer preference.
Like many other industrial reformations, it has been catalysed by the coronavirus pandemic. It coincided with what Mike Hawes, chief executive of the Society of Motor Manufacturers, describes as the industry's “biggest change in 100 years” ― electrification.
“We’re in uncharted waters in terms of manufacturing, supplies, supply chain and retail,” he told The National.
Generational industrial change doesn’t come cheap, and so the Covid hit on automotive revenues was inauspiciously timed.
In 2019, the global automotive industry sold 91,227,182 new passenger and commercial vehicles, data from the International Organisation of Motor Vehicle Manufacturers shows.
Just 12 months later, the figure had plunged 14 per cent to 78,774,320.
The industry staged a minor comeback in 2021, creeping up 4.96 per cent to 82,684,778.
Yet this is still the loss of a 10th of new-car sales in just two years, almost unfathomable in a sector that was calibrated to volume supply and jacked up by an addictive range of financing options.
In order to be sold, new vehicles by definition need to be produced, and in 2020 and 2021, the number of passenger cars made was more than 10 million fewer than in 2019, when 67,149,196 rolled off the production lines, OICA data shows.
The shortfall is enduring and pervasive.
In the UK, figures released by the SMMT at the end of April show car manufacturing declined 32.4 per cent during the first three months of 2022, with almost 100,000 fewer units made than in the same period last year. This does not bode well given car production in Britain plummeted to a 65-year low in July 2021.
Chances of a full recovery in 2022 are slim to none. Even as the pandemic's worst days appeared to be receding, in its wake a swirl of intractable challenges have been left behind ― from a global materials shortage to rampant energy costs.
Risks from Russia
The conflict in Russia and Ukraine has turned this swirl into a maelstrom.
“The most significant [risk impact-wise] would be if gas supplies are disrupted to Germany and other countries that host assembly and supplier plants,” Mr Young said.
“Germany is a bigger user, and more dependent on Russian gas than some of the other countries. Supply shortages that led to gas being rationed to industrial users would be hugely disruptive.”
Russian sanctions “will affect the global availability and pricing on a number of key raw materials, including some that are key to catalyst production”, he said.
When the chips are down
The one component that has monopolised coverage when it comes to a global shortage is the semiconductor.
The shortage cost the industry $210 billion in revenue and lost production of 7.7 million vehicles in 2021, consultant AlixPartners estimated.
“It goes deeper than semiconductors,” Philip Nothard, insight and strategy director at Cox Automotive, told The National.
“You’re talking about magnesium, you're talking about aluminium, water, leather,” he said.
“And the automotive industry is up against many other industries for the same materials.”
Mr Nothard acknowledged that semiconductors were “the big one” by dint of the number of raw materials it takes to make them and that demand for them went up during the pandemic as a result of the acceleration in the electronic goods industry spawned by lockdowns.
The shortage of components such as semiconductors and wiring looms ― the latter being heavily manufactured in Ukraine ― has forced vehicle manufacturers to radically alter their business models.
“The chip shortage seems likely to have an effect continuing into 2023 for most manufacturers, and this has led some to drop models from their product range and refocus on highest margin variants, albeit with reduced features where these are chip-intensive ― effectively, where is the best return on your chips,” Mr Young said.
Semiconductor chips, left, and electrical wiring looms, right, have been lesser-spotted commodities in recent times. Reuters; Getty Images
Motor industry makes margin call
The change of tack has led to Porsche dropping adaptive headlamps as an option for Taycan, Nissan leaving out navigation systems on thousands of vehicles that usually feature them, and Renault reducing the size of the digital screen on its Arkana SUV.
It is the prioritisation of higher margin variants that has flipped the industry on its head, and created the longest lead times now associated with cheaper, lower margin cars, such as the Fiesta.
The desertion of the mass market by the mainstream manufacturers leaves a gap for new players from the East.
“Look across the world at vehicles coming from China … they have low overhead costs and the economies of scale from their domestic markets could transfer across,” said the SMMT’s Mike Hawes.
“We know there are a lot of Chinese brands looking at entering the UK and European markets.”
One such brand is MG. Owned by Saic Motor, China’s largest vehicle manufacturer, the lower cost MG could well help shape the future of the automotive industry.
“[Such vehicles] may become the affordable, accessible volume vehicle in the UK market,” said Cox’s Philip Nothard.
An automotive paradox is born
The switch from volume manufacturing to high-margin vehiclescreated an automotive paradox: the industry is selling fewer cars yet is more profitable.
Volume manufacturing has been the industry’s core precept for years. The more cars that are made, the more parts that are required to make them, the more jobs that are created around their manufacture, and the more revenue that is generated for all stakeholders. In essence, the volume model drove the industry’s colossal economic footprint.
Yet with the pandemic and global materials shortages shattering that model, the industry adapted to survive. Profitability became the watchword du jour.
The focus on producing only top-of-the-range cars has increased the margin on each new vehicle sale, a trend amplified by more cars being sold to private motorists.
“Normally in the UK [the split] is around 50 per cent private, 50 per cent business and fleet,” Mr Hawes said.
“Private retail is a higher margin sales channel than fleet because you give a discount to fleets because they're buying in bulk."
A further dynamic is the shortage of new cars has led to used-car prices rocketing. Last year in the UK they increased by 30 per cent as demand grew. The demand has extended beyond conventional engine vehicles too.
Sales of used battery electric vehicles in the UK grew from 6,625 to 14,586 between January and March 2022, a rise of 120.2 per cent from a year earlier, according the SMMT. Sales of plug-in hybrids and hybrids totalled nearly 50,000 vehicles.
In all, UK sales of used cars in the first three months of the year grew to 1,774,351 from 1,687,755 in 2021, an increase of 5.1 per cent.
The end of target culture?
One British dealer who has been hugely appreciative of the shift from volume to profitability is Robin Luscombe, managing director of Luscombe Motors in Leeds.
“It’s brilliant,” he told The National.
“We're not in an oversupply situation. We're not driven by targets. Targets create bad habits.
“It's making the manufacturers normal. It's making the dealers normal. And it’s actually preserving the residual value of the customers’ cars because nobody is dumping loads of products into the market at ridiculously cheap prices."
Mr Luscombe’s delight at this new age of profit isn’t completely untempered, however.
“It comes with all sorts of problems," he said. "You can't walk into a dealership and say, ‘Can I have a car?’
"[Now we say] 'You can have one, we’ll order it for you, but it might take two, three, four months ― some of them might be in six, 12 or 18 months. That becomes a problem.”
A Luscombe Motors forecourt where proprietor and employees alike are thrilled at having fewer cars to sell. Photo: Luscombe Motors
Those at the coalface of this problem are the car salespeople.
"It’s been very challenging,” Andrew Milliken, senior account manager at Balgores Car & Van Leasing, told The National.
“In pre-Covid times you would always have loads of stock of a particular manufacturer.
“Ford would come out and say, ‘Oh, we've just had 100 Fiestas come through. Do you want to buy them and we'll give you 25 per cent discount if you take them all.’ This obviously completely died a death.”
To mitigate against stock shortages, Mr Milliken has changed his customer approach.
"Whereas before when we'd have renewals coming up for people coming out of lease it was for three-month periods," he said. "Now it's calling people six to nine months before the end of their agreement, minimum.”
Switching models
There is no blueprint for changing the way the industry works, Mr Nothard said.
“Many of the manufacturers don't exactly know what they're doing and how they're going to do it, but they know they've got to do it.
“Now a lot of that is about having access to that vehicle for longer. So there's a move away from producing the vehicle, pushing it out the factory gates, and then it going on somebody else’s funding while [the manufacturer] makes another one.
“They can't do that in the world of electric cars: the materials are not there and the profitability is not there. So they've got to make fewer vehicles but earn a better and a longer return on that asset."
Tesla has moved from niche product into the vanguard of industry electrification.
To achieve this, manufacturers are planning to "have a more direct relationship with the user of their vehicles for longer”, Mr Nothard said.
This effectively means that instead of the dealer or wholesaler taking all the profits from things like servicing, financing and upgrades, the vehicle manufacturer will now try to extract revenue throughout the vehicle’s life cycle.
Death of a car salesman?
Superficially, such a model appears ominous to dealers. Although Mr Nothard does not think their death knell needs tolling just yet.
“Manufacturers historically have never been good at retailing cars,” he said.
“They try to do it and they're good at marketing and customer relationships, but they're not very good at selling, and they're not very good at stock management and that kind of world."
He says there is a place for both but the relationship will change.
As an example he used Mercedes, which is switching to an agency model in Europe on January 1 next year.
At this point, every official Mercedes vendor in the region will be paid a commission by the manufacturer for each vehicle they sell, service they offer and upgrade they install.
Manufacturers will electrify and it will happen quickly
Mike Hawes, SMMT
Whether this shift will result in dealers-cum-agents being less or more profitable remains to be seen.
What is certain is that there will be fewer of them.
There has already been a marked shift in the industry to online sales, with the likes of Carwow, Cinch and Cazoo in the vanguard in the UK. The shift has meant manufacturers simply don’t need as many physical outlets. Instead, the focus has been on building larger showcase outlets in regional centres.
That said, Mr Nothard did point out several companies who started off solely as online sellers, like Cazoo, are now investing in bricks and mortar in recognition that customers still like to come in and test drive cars before buying them, and have a convenient place to take them for repairs should things go wrong.
Automotive's electric dreams
The drive to consolidation, then, was already happening before being turbocharged by Covid, because of electrification.
“At the moment, you've got something like 114 different electrified models on the UK market,” Mr Hawes said.
“From a UK perspective, all our manufacturers are looking at making hybrids and some of them already make electric vehicles. In the end all of them will have to, but the question is, at what pace do you get there?”
Nissan Ariya electric crossover sport utility vehicles being assembled by robots at the company's plant in Japan. Bloomberg
He described the shift as “the biggest change in a century” ― and it won’t come cheap.
“How do you afford that?” Mr Hawes said. “You need to maintain revenue. You’re looking at every opportunity to increase your incomes, hence [selling] higher margin vehicles.
Job losses inevitable
The component sector could be an early victim.
In December 2021, the European automotive suppliers’ association, Clepa, released a report forecasting that more than half a million jobs in the supply chain could be lost in internal combustion engine powertrain components production by 2035.
While vehicular and infrastructural electrification will create new jobs, they won’t be enough to compensate for such swingeing losses.
“You need a strong vehicle manufacturer so you can see that opportunities are there," Mr Hawes said.
“You also need support reskilling and helping companies identify market opportunities.”
What is clear is that the automotive industry has an arduous journey ahead. How it emerges will have a bearing on far more than the industry alone. In the meantime, good luck finding that new car.
Dubai launched the pilot phase of its real estate tokenisation project last month.
The initiative focuses on converting real estate assets into digital tokens recorded on blockchain technology and helps in streamlining the process of buying, selling and investing, the Dubai Land Department said.
Dubai’s real estate tokenisation market is projected to reach Dh60 billion ($16.33 billion) by 2033, representing 7 per cent of the emirate’s total property transactions, according to the DLD.
THE DETAILS
Solo: A Star Wars Story
Director: Ron Howard
2/5
The five pillars of Islam
1. Fasting
2. Prayer
3. Hajj
4. Shahada
5. Zakat
UPI facts
More than 2.2 million Indian tourists arrived in UAE in 2023 More than 3.5 million Indians reside in UAE Indian tourists can make purchases in UAE using rupee accounts in India through QR-code-based UPI real-time payment systems Indian residents in UAE can use their non-resident NRO and NRE accounts held in Indian banks linked to a UAE mobile number for UPI transactions
Sole survivors
Cecelia Crocker was on board Northwest Airlines Flight 255 in 1987 when it crashed in Detroit, killing 154 people, including her parents and brother. The plane had hit a light pole on take off
George Lamson Jr, from Minnesota, was on a Galaxy Airlines flight that crashed in Reno in 1985, killing 68 people. His entire seat was launched out of the plane
Bahia Bakari, then 12, survived when a Yemenia Airways flight crashed near the Comoros in 2009, killing 152. She was found clinging to wreckage after floating in the ocean for 13 hours.
Jim Polehinke was the co-pilot and sole survivor of a 2006 Comair flight that crashed in Lexington, Kentucky, killing 49.
What are the influencer academy modules?
Mastery of audio-visual content creation.
Cinematography, shots and movement.
All aspects of post-production.
Emerging technologies and VFX with AI and CGI.
Understanding of marketing objectives and audience engagement.
Tourism industry knowledge.
Professional ethics.
Other workplace saving schemes
The UAE government announced a retirement savings plan for private and free zone sector employees in 2023.
National Bonds unveiled a Golden Pension Scheme in 2022 to help private-sector foreign employees with their financial planning.
In April 2021, Hayah Insurance unveiled a workplace savings plan to help UAE employees save for their retirement.
Lunate, an Abu Dhabi-based investment manager, has launched a fund that will allow UAE private companies to offer employees investment returns on end-of-service benefits.
- At 9.16pm, three suicide attackers killed one person outside the Atade de France during a foootball match between France and Germany - At 9.25pm, three attackers opened fire on restaurants and cafes over 20 minutes, killing 39 people - Shortly after 9.40pm, three other attackers launched a three-hour raid on the Bataclan, in which 1,500 people had gathered to watch a rock concert. In total, 90 people were killed - Salah Abdeslam, the only survivor of the terrorists, did not directly participate in the attacks, thought to be due to a technical glitch in his suicide vest - He fled to Belgium and was involved in attacks on Brussels in March 2016. He is serving a life sentence in France
Crazy Rich Asians
Director: Jon M Chu
Starring: Constance Wu, Henry Golding, Michelle Yeon, Gemma Chan
Four stars
States of Passion by Nihad Sirees,
Pushkin Press
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
The Facility’s Versatility
Between the start of the 2020 IPL on September 20, and the end of the Pakistan Super League this coming Thursday, the Zayed Cricket Stadium has had an unprecedented amount of traffic.
Never before has a ground in this country – or perhaps anywhere in the world – had such a volume of major-match cricket.
And yet scoring has remained high, and Abu Dhabi has seen some classic encounters in every format of the game.
October 18, IPL, Kolkata Knight Riders tied with Sunrisers Hyderabad
The two playoff-chasing sides put on 163 apiece, before Kolkata went on to win the Super Over
January 8, ODI, UAE beat Ireland by six wickets
A century by CP Rizwan underpinned one of UAE’s greatest ever wins, as they chased 270 to win with an over to spare
February 6, T10, Northern Warriors beat Delhi Bulls by eight wickets
The final of the T10 was chiefly memorable for a ferocious over of fast bowling from Fidel Edwards to Nicholas Pooran
March 14, Test, Afghanistan beat Zimbabwe by six wickets
Eleven wickets for Rashid Khan, 1,305 runs scored in five days, and a last session finish
June 17, PSL, Islamabad United beat Peshawar Zalmi by 15 runs
Usman Khawaja scored a hundred as Islamabad posted the highest score ever by a Pakistan team in T20 cricket
This article is part of a guide on where to live in the UAE. Our reporters will profile some of the country’s most desirable districts, provide an estimate of rental prices and introduce you to some of the residents who call each area home.
ETFs explained
Exhchange traded funds are bought and sold like shares, but operate as index-tracking funds, passively following their chosen indices, such as the S&P 500, FTSE 100 and the FTSE All World, plus a vast range of smaller exchanges and commodities, such as gold, silver, copper sugar, coffee and oil.
ETFs have zero upfront fees and annual charges as low as 0.07 per cent a year, which means you get to keep more of your returns, as actively managed funds can charge as much as 1.5 per cent a year.
There are thousands to choose from, with the five biggest providers BlackRock’s iShares range, Vanguard, State Street Global Advisors SPDR ETFs, Deutsche Bank AWM X-trackers and Invesco PowerShares.
Bogleheads follow simple investing philosophies to build their wealth and live better lives. Just follow these steps.
• Spend less than you earn and save the rest. You can do this by earning more, or being frugal. Better still, do both.
• Invest early, invest often. It takes time to grow your wealth on the stock market. The sooner you begin, the better.
• Choose the right level of risk. Don't gamble by investing in get-rich-quick schemes or high-risk plays. Don't play it too safe, either, by leaving long-term savings in cash.
• Diversify. Do not keep all your eggs in one basket. Spread your money between different companies, sectors, markets and asset classes such as bonds and property.
• Keep charges low. The biggest drag on investment performance is all the charges you pay to advisers and active fund managers.
• Keep it simple. Complexity is your enemy. You can build a balanced, diversified portfolio with just a handful of ETFs.
• Forget timing the market. Nobody knows where share prices will go next, so don't try to second-guess them.
• Stick with it. Do not sell up in a market crash. Use the opportunity to invest more at the lower price.
What can victims do?
Always use only regulated platforms
Stop all transactions and communication on suspicion
Save all evidence (screenshots, chat logs, transaction IDs)
Report to local authorities
Warn others to prevent further harm
Courtesy: Crystal Intelligence
The biog
Favourite hobby: I love to sing but I don’t get to sing as much nowadays sadly.
Favourite book: Anything by Sidney Sheldon.
Favourite movie: The Exorcist 2. It is a big thing in our family to sit around together and watch horror movies, I love watching them.
Favourite holiday destination: The favourite place I have been to is Florence, it is a beautiful city. My dream though has always been to visit Cyprus, I really want to go there.
Indian origin executives leading top technology firms
Sundar Pichai
Chief executive, Google and Alphabet
Satya Nadella
Chief executive, Microsoft
Ajaypal Singh Banga
President and chief executive, Mastercard
Shantanu Narayen
Chief executive, chairman, and president, Adobe
Indra Nooyi
Board of directors, Amazon and former chief executive, PepsiCo
Venom
Director: Ruben Fleischer
Cast: Tom Hardy, Michelle Williams, Riz Ahmed
Rating: 1.5/5
The specs
Engine: 77.4kW all-wheel-drive dual motor
Power: 320bhp
Torque: 605Nm
Transmission: Single-speed automatic
Price: From Dh219,000
On sale: Now
MATCH INFO
Rugby World Cup (all times UAE)
Final: England v South Africa, Saturday, 1pm
'Morbius'
Director: Daniel Espinosa
Stars: Jared Leto, Matt Smith, Adria Arjona
Rating: 2/5
The specs
Engine: 3.9-litre twin-turbo V8
Power: 640hp
Torque: 760nm
On sale: 2026
Price: Not announced yet
Dubai Bling season three
Cast: Loujain Adada, Zeina Khoury, Farhana Bodi, Ebraheem Al Samadi, Mona Kattan, and couples Safa & Fahad Siddiqui and DJ Bliss & Danya Mohammed
Rating: 1/5
How to apply for a drone permit
Individuals must register on UAE Drone app or website using their UAE Pass
Add all their personal details, including name, nationality, passport number, Emiratis ID, email and phone number
Upload the training certificate from a centre accredited by the GCAA
Submit their request
What are the regulations?
Fly it within visual line of sight
Never over populated areas
Ensure maximum flying height of 400 feet (122 metres) above ground level is not crossed
Users must avoid flying over restricted areas listed on the UAE Drone app
Only fly the drone during the day, and never at night
Should have a live feed of the drone flight
Drones must weigh 5 kg or less
Other acts on the Jazz Garden bill
Sharrie Williams
The American singer is hugely respected in blues circles due to her passionate vocals and songwriting. Born and raised in Michigan, Williams began recording and touring as a teenage gospel singer. Her career took off with the blues band The Wiseguys. Such was the acclaim of their live shows that they toured throughout Europe and in Africa. As a solo artist, Williams has also collaborated with the likes of the late Dizzy Gillespie, Van Morrison and Mavis Staples. Lin Rountree
An accomplished smooth jazz artist who blends his chilled approach with R‘n’B. Trained at the Duke Ellington School of the Arts in Washington, DC, Rountree formed his own band in 2004. He has also recorded with the likes of Kem, Dwele and Conya Doss. He comes to Dubai on the back of his new single Pass The Groove, from his forthcoming 2018 album Stronger Still, which may follow his five previous solo albums in cracking the top 10 of the US jazz charts. Anita Williams
Dubai-based singer Anita Williams will open the night with a set of covers and swing, jazz and blues standards that made her an in-demand singer across the emirate. The Irish singer has been performing in Dubai since 2008 at venues such as MusicHall and Voda Bar. Her Jazz Garden appearance is career highlight as she will use the event to perform the original song Big Blue Eyes, the single from her debut solo album, due for release soon.
