Buyers shy away from used car market

Paranoia about job security and tight credit have prompted some Dubai residents to back away from buying a car which is taking its toll on car dealers.

The 126 showrooms at the Al Aweer used car complex stand empty. The only people seen walking around are the salesmen and people looking to sell their cars.

“We used to sell 10 cars a month and now we only sell one. There have been very few buyers especially for the luxury car models,'' Adel Hayek, a car dealer at the Al Aweer complex, said.

Low demand

A man trying to sell his car was finding it hard to convince dealers in the complex to take it.

“I've been around the dealers, I've posted my car on the websites but no one is buying,'' he complained. “We are getting more offers for second-hand cars but there's no demand so we've had to reject about 70 per cent of offers,'' Hayek said.

When asked whether they see a possible end to this slump, there doesn't seem to be much optimism. Anoop of Metro Motors said: “The car business is entirely dependent on the financing structure of banks so, until the banks become more lenient, our sales will continue to drop.''

As a result, second-hand car prices are significantly marked down and can be pushed down further if you're willing to bargain. Farhan Malek, a Dubai resident, was able to bring down an already reduced price of a Land Cruiser from Dh95,000 to Dh80,000.

“I felt guilty afterwards; dealerships are struggling so it's difficult for them to refuse an offer. But a deal's a deal,'' he said.

Other car dealers reported steady sales over the last two months. Wassim Derby, Marketing Manager of Mercedes Benz dealership Gargash Enterprises, said: “In the last quarter of 2008, sales have been stable.

“It was only in December that we saw a slight decline. We don't know if that is because of the current financial crisis or due to the number of public holidays that month.
“Sales in January have been pretty stable as well.''

Online trends

Online classifieds have reported an increase in second-hand car listings, though traffic and page views have remained roughly the same. GNWheels4U reported 2,235,583 page views in October 2008 and only 2,146,357 page views in January

Price watch

Toyota Land Cruiser