News that Dubai’s government holding company is seeking to have interest payments due on billions of pounds in loans taken out to fund Dubai World, a development that includes some of the world’s most prestigious real estate projects, deferred until next May will no doubt be sending some uncomfortable thoughts through the minds Europe’s top car company officials today.

In recent times countries right across the Middle East have taken advantage of the economic downturn and subsequent rout in the stock market by pouring vast amounts of money into Europe’s car industry through increased holdings – to the point where the governments of the likes of Qatar, Kuwait, Abu Dhabi, Dubai and Saudi Arabia now hold substantial interests in many of Europe’s established car makers.

The arrival of Middle Eastern investment has helped shore up plunging stock prices as well as provide new avenues of capital to fund new model development at a time when borrowing from traditional institutions has proved difficult.

The question raised by the Dubai government’s apparent default on its loan obligations for Dubai World is: just how secure are the investments being made by the Middle East in the likes of Aston Martin, Ferrari, Mercedes-Benz and the Volkswagen Group – including all ten of its brands? It also poses serious questions about the short term financial stability of the Gulf region.