The Gulf News reports that frequent promotions by manufacturers are harming the local industry's profitability and are an indication of underlying depressed market sentiment.

K. Rajaram, chief executive of Dubai-based Al Nabooda Automobiles - which represents Porsche, Audi and Volkswagen - told the Gulf News: "There is one or more promotion happening every other week, and dealerships are forced to be part of one or the other."

He added that the 'situation in the UAE is still not as bad as in some of the other Gulf states, especially Oman where cars are virtually being given away for free'.

Rajaram also told the newspaper that he is forecasting a flat year for the UAE market.