NoFilterDXB: UAE’s business confidence is back – for proof check out surging fleet sales
Fleet operators and rental companies join individuals in ramping up UAE’s car demand
Dubai: Michel Ayat has a ready way to track business sentiments – check out the fleet sales happening at any given time in the UAE. By that marker, business confidence in the UAE is gunning into a higher gear.
“As the economy continues to recover and businesses start to expand, we shall gradually see fleet demand increasing in line with the market,” said Ayat, CEO of AWR Automotive, the Nissan, Infiniti and Renault dealership. “We are already over the 50 per cent mark in fleet sales, driven by strong confidence.”
Yes, industry observers say that the split between new car sales is running neck-and-neck between those made to individual owners and those bought by fleet operators. These days, apart from traditional rent-a-car companies, digital portals leasing or offering car ‘subscriptions’ are adding to the demand for fleets.
Whatever be the case, UAE’s auto market will end 2021 on a high pitch, with volumes of nearly 183,000 new cars compared with just over 152,000 plus units in 2020. That’s a solid 20 per cent on 2020 sales, and could set up 2022 for another 200,000 units. That, by any measure, is good going for the UAE car market.
Feeling good
Businesses aren’t the only ones riding on the feel good factor, said Ayat. There is “an increase in consumer confidence and spending (that is) matching almost pre-Covid times,” he said.
The buildup was slow to begin with, as sales in the first three months of this year showing the effects of the pandemic slowdown from 2020. But by the Eid holiday promotions during the second quarter, demand was perking up and by September, it had turned into a deluge.
Because all those fleet operators who were delaying their next round of purchases finally came around to taking their decisions ahead of the Expo opening in October. It was no coincidence then that “business activity in the UAE rose to the highest level in more than two years last month,” said Ayat, who also heads the Dubai Chamber’s Automotive Dealership Group.
The only thing that continues to hold back more sales is the delay in shipping them over to the UAE from factories all over the world. Because the auto manufacturers are facing the same difficulty as any other industry dependent on semiconductor chips.
There are two sets of shortages at work here, according to Ayat:
- A shortage of semi-conductor chips affecting the production of new vehicles.
- A shortage of containers impacting the automotive supply chain and worldwide deliveries of vehicles and parts.
- In addition, there is an increase in shipping rates, which are adding to the costs of automotive suppliers and distributors.
Launch date for Ariya
Recently, Nissan showcased its EV model, the Ariya, at the Expo and will do the same at #NoFilterDXB. Does all this mean a firm date for the formal launch?
Ayat will not be drawn into giving a firm date, but did say: ”Ahead of introducing any model, including EVs, Nissan continues to consider market readiness and demand as well as infrastructure viability in order to be able to bring the technology to the market.
“Our priority is to ensure that we deliver this highly advanced model — equipped with new technologies to customers with the highest level of quality and care. Nissan remains optimistic about the future of electric vehicles in the region and will share further updates regarding Ariya’s plans for the Middle East.”
Until then, Ayat and Automotive will have the Patrols and the Infiniti models catching the buyer’s eye…