Automotive sales in Saudi Arabia held up fairly well in the immediate aftermath of the financial crisis that pummeled global auto industry, Saudi Arabia Autos Report Q2 2010 said on Friday. But as economic slowdown has dragged on, sales have struggled, Companiesandmarkets.com said. Between April and November 2009, total vehicle sales dropped 7 percent year-on-year (y-o-y), to 347,173 units. By comparison, sales registered 374,720 units in the year-ago period, The most recent figures suggest the situation is not improving. In November 2009, sales registered an 11 percent y-o-y drop, to 41,545 units. However, overall, it is believed the downturn in the GCC to be less pronounced or sustained as elsewhere. After tepid growth in 2009 we see a stabilization in the market this year, and growth in 2011-2014 should be even more robust. The value of sales is expected to reach $17 billion this year, a marginal increase over 2009. “But we expect they will rise to $21.5 billion by 2014. BMI expects that by the end of the forecast period, total sales should top 816,291 units, up more than 37 percent over 2009 levels. We expect growth in the commercial vehicle segment to be particularly strong over the next five years.” The decline is largely due to macroeconomic factors. The country has not escaped the worldwide economic slowdown - we estimate the Saudi economy grew an anemic 0.4 percent last year. Banks have tightened lending policies and households have also reined in their spending. Consequently, dealerships have cut back on inventories. A debt crisis in neighboring Dubai has also made investors more cautious of the Middle East. While Dubai's problems are unlikely to have much of a real impact on Saudi Arabia, investors may approach the region with more wariness. There have been mixed results among automakers. In the April to November 2009 period, Nissan Motor, Hyundai Motor and Kia Motors all posted sales growth. Hyundai had the best performance among the three standouts, posting sales growth of 46 percent y-o-y during the period. Meanwhile, other brands have suffered. General Motors Company (GM)'s sales tumbled 31 percent during the eight-month period, while Ford Motor's sales dipped 5 percent and Toyota Motor's sales slipped 3 percent y-o-y.
