One of the international news items of the day is the pending debt default of Dubai World, a large state-owned development company in the United Arab Emirates. Dubai has become the financial and economy hub of the Persian Gulf area and has plenty of high-rollers. Dubai’s royal family is a major player in the horse-racing industry and are welcome guests in Lexington when they open up their pockets at the Keeneland horse sales.
If Dubai World is about to go Chapter 11 (or whatever the UAE equivalent is), what might that mean for Dubai’s high rollers and their demand for US cars?
When I checked on Dubai’s market for vintage cars, news of an interesting law came onto the screen; cars older than 20 years can’t get plates as of January 2009 unless they are classic or vintage vehicles and 15 year old cars will be given that treatment in 2010. No Cash for Clunkers here.
What it might mean is that Dubai will likely becoming a major exporter of older cars. Poorer nearby countries such as Iraq or India might be the recipients of those retired clunkers; there will be some shipping opportunities there.
Dubai might also be an increased importer of both new and vintage cars as the older cars get phased out; Dubai has a very young fleet of cars, with the average age is 5.6 years, so there aren’t as many old cars as we’d have in the US where the average age is 8 years.
If the high rollers in Dubai want something from the 20th Century, they may have to get into the international classic car market. The question will be whether they can continue to afford it.
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