UAE used car market moves into fast lane
It’s not just new cars that are being driven off from dealerships across the country, sales of used cars too are also picking up.
“The used car market in the UAE is worth around US$2.5 billion in business and it is growing by a strong 15 per cent annually,” according to Kerem Kuyucu, the managing director of Carmudi Middle East, an online marketplace for new and pre-owned cars.
The classified ads website Dubizzle has also contributed to the growing phenomenon.
Al Futtaim Automall, a leading pre-owned dealer with eight showrooms, has experienced a mighty 30 per cent increase in sales volumes over 2013.
“We have seen a 30 per cent increase in sales year-on-year with our compound growth around 11 to 12 per cent,” said Ramakrishnan Karthikeyan, the national operations manager at Al Futtaim Automall. “Online contributes more than 20 per cent of our business and I would say it is growing in line with the market. Dubizzle is a good source of supply to us, we partner with Dubizzle as our online showroom — it is like a location for us. We provide a hassle-free experience for customers buying from Dubizzle and we buy probably 100 cars a month from it.”
According to Dubizzle, its automotive section had more than 1.6 million visitors in the past month alone, with Abu Dhabi’s MotorWorld dealers receiving more than 20,000 phone calls from buyers inquiring about the cars posted there.
Technology has brought down the cost of buying and selling pre-owned cars to such a level that sellanycar.com, a one-year-old UAE-based start-up, claims that it would become a major player in the segment.
“This is a unique way of selling your car. You go to our website and answer basic questions: make, model, age, kilometres, etc and you will get an immediate approximate value,” said Saygin Yalcin, the founder of sellanycar.com. “We have a database with millions of price points and we offer the fairest price possible to the customer. You take your car to one of our partner garages and in 30 minutes we will give you cash for your car with zero paperwork for you. We will buy any car. We only sell to the auto industry so we do not deal with the public from a sales point of view and our margins come from the volumes we deal in.”
While technology has boosted the used car market, bricks and mortar is still a very important element in the UAE.
“The car market is similar to the retail market in that people like to shop physically, they like to be able to see, touch and smell the cars they are buying,” said Mr Karthikeyan. “We have just opened an Abu Dhabi showroom in Musaffah, and we plan an aggressive expansion both expanding and opening new showrooms in Dubai and the Western Region of the capital.”
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Updated: September 23, 2014 04:00 AM