UAE’s used car market logs in rapid recovery

Dubai - Car dealers need to quickly restructure their business models to be consumer focused and more used car oriented, experts said

The UAE’s used car segment has logged in a steady recovery and is now well on its way to achieving sizable growth, experts said.

Craig Stevens, CEO of Dubi Cars International, an online car marketplace, said that the auto market in the UAE is transforming and will continue to do so for the foreseeable future.

“We experienced a slight decline in visitors on the Dubi Cars website and mobile application between the months of March and May 2020, especially during the government sanitisation disinfection programmes, since the onset of the Covid-19 pandemic,” he said. “However, as the markets reopened, we have experienced a rapid recovery, followed by growth, as consumers’ purchasing trends have adapted through digital solutions. Coming out of the Covid-19 lockdown we witnessed a rapid increase in demand from customers looking to purchase and sell UAE spec cars. Our leads increased to over 100,000 a month, with 50 per cent of leads coming from outside the UAE – an all-time record-high for Dubi Cars.”

Stevens added that the new car market is in steep decline by 40 per cent to 60 per cent year-on-year and that this is unlikely to change quickly “unless we see some attractive leasing deals which allow customers to drive a vehicle without paying large down-payments and large monthly repayments, hence why the used car market is rapidly growing.”

The used car market, he said, will dominate the UAE car market and car dealers need to quickly restructure their business models to be consumer focused, used car oriented and most importantly optimising digital solution opportunities.

“The used car market is prominently structured to cater both - the local and export market,” Stevens said. “However, due to the Covid-19 pandemic there is excess stock in the market and dealers will have to work hard to expand their reach, by optimising digital solutions and venturing into the export market.”

Dubi Cars recently conducted a consumer survey titled, ‘Dubi Cars Online Car Buying’ and of the 1,000 respondents, 65 per cent said they would prefer to buy a used car. Over 75 per cent of buyers said they wouldn’t mind completing the car purchase online with the key reasons being ease, trust, convenience, saving time and money. However, one of the biggest challenges consumers face when purchasing online is the inspection of the used car, lack of information about the car, and trading in their existing car.

rohma@khaleejtimes.com