“We saw a drop in the luxury auto market in 2009, but that recovered very quickly and our expectation is that it will actually grow over the next five years,” said Amr Dajani, Chief Strategy and Development Officer for the M. A. Naghi and Sons group.

The market in the luxury segment, particularly in the upper segment, has been stagnant over the last few years, said Dajani. However, there was a great deal of potential and as new channels of wealth developed in the Kingdom’s economy, he saw a developing interest in the market.

BMW Group Middle East’s own figures for the first half of 2010 revealed a 13 percent sales growth over the same period in 2009. In the 14 Middle East markets, the company delivered 8,096 BMW and MINI vehicles to customers, a testament to the fundamental strength of the brands in the region.

Sales in Abu Dhabi rose three percent (1,707 cars), the highest number of vehicles sold in the region. In Saudi Arabia, sales increased by 19 percent (1,478 cars). Oman and Bahrain also recorded increases where sales were up nine percent (304 cars) and four percent (319 cars) respectively.

The flagship car, the 7 Series, remained the top selling model followed by the X6 Series and the X5, now in its 10th year of production.

In Saudi Arabia, the word “luxury”, said Dajani was almost always interchangeable with “large,” which came probably as a result of large families and structure here. He noted a change as the nuclear family rather than the extended family entered the market and an increase in the influence of women in the buying.

This, added Dajani, was a result of their increasing participation in the workforce — partly as wage earners and partly as they developed a need for a separate vehicle for their own use.

He predicted that as a result the three and five series segments were potential sources of future increased sales.

It’s still the 7 series, S Class Mercedes and Jaguar XJ models that dominate the market. There is, however, a developing trend among quality car manufacturers to make the smaller cars more exciting.

For example, the yet to be released Land Rover Evoque is a power packed full feature Landrover but at an entry-level price.

A hidden factor in luxury market came as a result of the fact that a couple of years ago Saudi Arabia imposed a ban on the import of vehicles over five years old. This gave the local quality used-car market something of a boost that rippled into the new car sector.

Affordable pre-owned luxury cars became scarcer.  With BMW it had a positive effect on the used car market. A good quality used car became a desirable buy.

Dajani was cheerfully optimistic about the post economic hiccup introduction of new entry-level customers into the market. Banks were easing credit restrictions and loans were becoming easier to get. There was, he thought, a lot of competition in the marketplace to acquire new customers for credit cards and finance deals. He thought that the scheduled development of the mortgage market indicated an easing in money flow for purchase of major consumer items and property.

There are also new players emerging from the shadows and coming into play in the luxury market. The luxury end of the Hyundai range — the Genesis — is a case in point and represents good value for money.

There is however a very rapid expansion in the mass market sector as well. The yen has been very expensive against the dollar and this helped the Korean car manufacturers who have made great strides in quality development.

Affordable luxury — or size — is definitely on the cards for the Saudi buyer. The traditional makers will have to keep a wary eye on the competition in terms of the quality/price balance. Whilst reputation and history are still very much part of the marketing strategy, a new generation of savvy buyers with credit in hand will be scrutinizing their prospective purchases with added care.