Old vehicles put dealers on the road to success
The streets of Abu Shagara in Sharjah are filled on Thursday and Friday nights with dealers ready to snap up the perfect set of wheels from a steady procession of cars driving up and down in a mechanical beauty parade. With a subtle wave of the hand, a dealer signals for a driver to stop, and business gets going.
"The first thing we do is ask for the details of the car," said Abu Mohammed, one of the dealers. "There are things we can tell just by looking at the car but we also ask for other details like the model and the asking price." Business is brisk at these roadside car auctions in Sharjah, just as it is across the UAE for a growing number of second-hand car dealers as people hold back from making large financial commitments on new models. There are about 3 million cars in the country, says Syed Ali, the managing director of Autodealer UAE. About 80 per cent are private vehicles and the remaining 20 per cent commercial transport vehicles.
"People are still hurting from the economic crisis and they are looking for savings in all their purchases," said Fadhil Bakar, a salesman at Al Aweer used-car market. "So they buy used cars because they can save a lot." The market research company Euromonitor International reports that UAE consumers spent a total of US$3.14 billion (Dh11.53bn) on new and used vehicles last year, a 2.7 per cent drop from the previous year.
Many of the dealers in Sharjah have agreements with nearby used-car showrooms. "We pay the showroom a small fee, like Dh100, and the sellers pay the transfer fees, which can be as much as Dh480," said Haji Majid, another dealer. It is difficult to estimate the total market value of the cars on sale in Abu Shagara because there are hundreds of buyers looking for a quick deal. But the volume of traffic suggests business is booming.
"The problem is these people make several private deals every day and you can't track them," said Khalfan Mousa, a clerk at one of the used-car showrooms. "But in our showroom alone we can process sometimes more than Dh500,000 worth of deals a day." As the second-hand car business grows in Sharjah, so does the trade in fake vehicle parts, according to business leaders. The Sharjah Chamber of Commerce and Industry (SCCI) has called for a campaign against the proliferation of fake car parts in the UAE.
Alexander Lexi, the trademark protection manager for Ford Middle East, said at a recent workshop in the emirate that the international markets are flooded with $12bn worth of counterfeit vehicle parts. The Gulf region's share of that is between $150 million and $200m, he said. Among the wheeler-dealers on the streets of Abu Shagara, some of the buyers are businesspeople who buy cars to re-sell either at the same market, in the showrooms or for export.
"I don't come here everyday, only weekends," said Mr Mohammed. "And a good day for me is when I can buy two or three cars and sell at least one on the same day." The turnaround sale period for these cars varies from a few minutes to six months but vehicle traders at the informal market can usually re-sell their cars faster than the showrooms. Profits can range between Dh500 to more than Dh2,000 per car on a good sale, according to dealers.
"I like to come here because it is easy," said Omar Anwar, a Sharjah resident who owns a 2001 Nissan Pathfinder. "I don't have to park or list my car anywhere. I just drive it around here and, inshallah, I can sell my car real quick and if I am lucky buy another one within a few hours." firstname.lastname@example.org
Updated: June 22, 2010 04:00 AM