Dubai: Sales of pre-owned vehicles are emerging as a parallel track in itself for leading local automobile dealerships. And the reasons are stark as this category accounts for 100,000 units a year and has a combined value of Dh5.5 billion.
"In 2010, after the market bottomed out, our new car sales saw a growth of 11 per cent while the used cars saw 40 per cent," said Michel Ayat, CEO of Arabian Automobiles and the dealer for Nissan and Renault. "We foresee steadily increasing demand for used cars with more than 40 per cent growth in volumes over the last year."
Al Futtaim Automall, the second-hand vehicles division of Al Futtaim Group, is also seeing this trend reflected in sales during the first three months of this year. "By the end of the first quarter, we're planning to finish 11 per cent ahead of 2010," said Colin Cordery, Managing Director of Al-Futtaim Automall.
Cordery said the growth of second hand car sales now reflects that of a mature market.
Al-Futtaim Automall recently opened a new outlet in Ras al Khaimah and plans to open another in Al Ain this year.
Emerging ratio
Arabian Automobiles is projecting the new-car to used-car sales ratio to shift to 1:1 in coming years as pre-owned vehicles become an equally popular choice. The market is still considerably smaller than the UK, where used car sales are double those of new ones.
Arabian Automobiles last week opened a 7,000 square metre used car facility. These cars will be certified by the Certified Pre-Owned (CPO) vehicle programme recently introduced in the local market.
"If you look at the 16 per cent market share Nissan has across the UAE, you're talking about Nissan selling around 40,000 cars," said Felix Welch, director of sales and marketing at AW Rostamani Group. "If our forecast is right and in the next five years we can take the market to a one-to-one position to 40,000 Nissans to be sold on a used as well as on a first-hand basis that's huge growth."
Independent second-hand car dealers continue to take the largest share of this segment. According to Ayat, 70 per cent of volumes coming are from independent dealers.
There are currently around 200 independent used car showrooms in Dubai, mostly concentrated in Al Aweer, 400 in Shajrah and 50 in Abu Dhabi.
