Dubai: The used-car market business at Dubai Cars and Automotive Zone (Ducamz) has come almost to a standstill since the Dubai Customs implemented a new data collection system for all free zone transactions.
The system was switched from Mirsal-1 to Mirsal-2, which requires much more information from used-car dealers, information that is often not available.
"Mirsal-2 is not compatible for this purpose. We are having a big problem doing our day-to-day business because of the lack of proper information and knowledge of the system," said Ali Asghar, managing director of Cougar Motors.
Many used-car dealers met with government officials on Sunday at the Ducamz office to question the necessity of Mirsal-2.
The customs authority told the traders that the new system aims to prevent illegal shipments, fraud and smuggling.
"In the name of revenue collection, the system is killing the growth of the industry," said Athar Seddiqi, managing director of Unique Motors, a showroom with Ducamz.
Under Mirsal-1 six questions were required to be answered for sales transactions to take place. Under Mirsal-2 25 to 40 questions are asked.
Delay
The process of import and export is delayed, causing a loss in revenue and business, dealers said.
"I'm scared to go to my showroom because I sold a lot of cars last week but can't make export papers," said Rizwan ul-Haq, managing director of Haq International Motors. "Customers are asking for their money back."
Ducamz, an eight million square foot area housing some 400 dealers who contribute about Dh210 million to the city's economy, is managed by Dubai World subsidiary Jafza and Dubai Customs.
Built under the vision of His Highness Shaikh Mohammad Bin Rashid Al Maktoum, Vice-President and Prime Minister of the UAE and Ruler of Dubai, the free zone has grown to become one of the world's largest.
Mainly serving the re-export market, auto sales grew from 3,000 used cars to 25,000 cars per month in the past decade within the free zone, but the new system has brought numbers down to 10,000, dealers said.
Asghar said that due to difficulty in doing business, 150 showrooms from Ducamz have already moved to other markets such as Africa.
"If this attitude continues, and the government doesn't realise this grave issue and intervenes to change the attitude of Dubai Customs, the remaining 400 showrooms will have to start finding greener pastures, which is their right," he said.
Penalties
Numerous penalties and fines are being levied on the dealers for not providing complete transaction information, which is driving down revenues for the businessmen.
"We don't have the information that is required by the new system, such as how the car will be shipped. That information is with the client, at a later date," Haq said.
"If we make documentation with wrong information, we have to pay big penalties. So are scared of working," he said.
Nasser Mohammad Shafi, manager of International Automotive Motors, said: "I just come here for business, not fighting. I sold 20 cars last week and the customer is fighting with me to complete the export papers. I can't, because I don't know about Mirsal-2."
"I sold a car for Dh3,000, and I'm paying Dh5,000 in fines to the customs. Is this fair?"
Dubai Customs officials declined to comment immediately and were not available to comment later.
