UAE Car Finance Market Outlook to 2021: Ken Research

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UAE Car Finance Market Outlook to 2021 Ken
Research
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How Car Finance Market Is Positioned In UAE? The
United Arab Emirates is the second-largest
automotive market including cars, parts and
accessories, trailers and semi-trailers, trucks,
public transport vehicles, and tractors in the
GCC after Saudi Arabia. Passenger cars account
for approximately of the UAE automotive
market, with commercial vehicles such as trucks,
vans and buses accounting for the remaining .
Owing to low car prices, well constructed
highways, and most importantly the low fuel
prices and easy availability of car finance,
owning a car is relatively easier in UAE.
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• UAEs financing methods are different from the
  conventional methods of financing. Majority of
  the banks and finance companies follow the Sharia
  system which does not include the concept of
  interest. Until May 2011, the customers were
  eligible for 100 loan on cars a system of down
  payment did not exist for car loans.
• In May 2011, the government, as a reform to
  tighten car financing, introduced the system of
  down payment. From then, the customers can obtain
  of the cost as loan and of the cost is
  mandated to be paid as down payment by them.
• During the review period, 2011-2016, the market
  has displayed a decent growth until 2015, but by
  the end of 2015 the market started declining. A
  fall in the credit disbursement had been observed
  during 2016 that was resulted out of the falling
  oil prices, increasing loan rejection rates,
  stringent lending policies adopted by the banks
  due to the piling up of non-performing loans and
  other such factors.

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• However, upcoming trends such as increased demand
  of electric vehicles, growth of used car market
  and others are expected to enable the market
  recover in the coming years.
• What Are The Major Trends And Issues In UAE Car
  Finance Market?
• From the past few years, the demand for used cars
  is rising in the country. In 2014, the market for
  used cars has increased by due to which it is
  estimated that the used car market will overtake
  the new car market in the next ten years. The
  used car market of UAE is worth nearly USD
  billion as of 2016.
• The introduction of quotas for hybrid cars in
  government vehicle fleets, coupled with campaigns
  aimed at encouraging Dubais motorists to switch
  to environment friendly cars, is expected to open
  up new markets for the sector. Recently, the
  government of Dubai has decided that, 10 of all
  new vehicles bought by the Dubai government will
  be electric cars with a motive to reduce
  emissions by 16, by the end of 2020.

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The rising rate of non-performing loans has
induced the Central Bank of UAE to appoint an
assessor of individual and corporate credit
worthiness named Al Etihad Credit Bureau in 2014.
The introduction of consumer credit data from the
bureau has led to more cautious lending policies.
This has increased the rejection rates of loans
in the country thereby impacting the credit
disbursed for car loans. What Is The Future
Outlook For UAE Car Finance Market? The market is
expected to recover during the forecast period
from the fall that was observed towards the end
of the review period. It is anticipated that the
car finance market in the country will grow at a
CAGR of during the forecast period 2017-2021.
The recovery is presumed to be at a slow pace due
to various factors such as low deposit rates
prevailing in the market and high rate of
non-performing loans compelling the banks to
consolidate their existing activities rather
focusing on growth. Moreover, the impact of
credit reports made available by the credit
bureau is expected to raise the loan rejection
rates.
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However, a growth is expected to be observed in
the market even in the midst of all the
aforementioned factors, which will be supported
by an increased number of bundled offerings, new
innovative strategies adopted by the banks and
dealers and other entities. In accordance with
the current trend, the used car penetration is
displaying a consistent lift. Hence, it is
anticipated that a rise in the demand for used
car serve as a driving force for the
proliferation of car finance market. Companies
Cited In the Report List of Companies
Companies Covered in the
Report Mashreq Bank Dubai Islamic Bank Emirates
Islamic Bank Major
Players in UAE Car Finance Market Al Hilal
Bank Emirates NBD
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• Al Wifaq Finance
• Finance House
• Key Factors Considered In the Report
• UAE Car Loan Industry
• NBAD UAE Auto Finance
• Used Car Sales in the UAE
• Financing a Used car in UAE
• Compare Auto Loans in the UAE
• Car Financing Option in UAE
• Vehicle Financing in the UAE
• Used Car Financing in the UAE
• For more coverage click on the link below
• https//www.kenresearch.com/banking-financial-serv
  ices-and-insurance/loans-and-advances/uae-car-fina
  nce-market/110143-93.html

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