The used car business here has staged a recovery, and the number of car showrooms once again has crossed the 200 mark as dealers report brisk business. Dealers attribute the increase in used car showrooms over the last six months to various reasons: lower showroom rents; brisk business both in left and right-hand drive models, especially those imported from Japan; and the growing number of customers.

Sharjah's used car market, believed to be the region's biggest, and among the biggest in the world, suffered a blow when many showrooms out of some 185 dealing in right-hand used cars moved to Ducamz (Dubai Customs Automobile Zone) in the Ras Al Khor area of Dubai early last year.

That move affected the car market in the emirate, especially the right-hand drive sector. However, the situation has changed over the last few months as a number of car dealers, including some who had gone to Dubai, have reopened their showrooms in Sharjah.

"Some 10-15 showrooms dealing in right-hand used cars were left in Sharjah, while the majority of them moved to Dubai at the beginning of last year. But the number has once again touched the 100 mark," said Syed Ameenuddin of Jumbo Used Cars, one of the right-hand car dealers who opted to stay back.

Most of the showrooms, he added, had opened during the last three to four months. "Sharjah still has a great reputation worldwide as a major used car market and has continuously been receiving customers from around the world," he noted.

The number of left-hand used car showrooms, he said, had also increased, with over 150 now in the emirate. Mian Moeenuddin of Dubai 2000 Used Cars in Sharjah said some right-hand used car dealers who had moved to Dubai had re-opened their showrooms in Sharjah.

"About six months ago, more than half the showrooms and sheds were vacant in the Abu Shagara area, and the rent had dropped by more than 50 per cent. However, now there is not even a single vacant showroom available. The number will increase further as a lot of people are still searching for showrooms to start their businesses," he said.

Rents in the Dh40,000-Dh50,000 range plummeted to Dh15,000-Dh20,000 after the mass migration to Dubai. Now they have once again risen to Dh25,000-Dh35,000. A reason for the increase in the number of customers in the Sharjah market was that foreign customers also bought other items such as used car spares from the scrap market, furniture and accessories, and they found it easy to buy all these items from one area for easier shipment, Moeen noted.

Mohammed Amir, managing director, Naz International Motors in Ducamz, said his business was not affected by the rising number of showrooms in Sharjah. "We are doing normal, or even better business," he claimed.

He added that healthy competition would improve the business, although the profit margin has dropped considerably. "Though the Sharjah market has regained its strength after a lapse of about a year, there have been some changes in the business," noted Syed Ahmed of Ali Zia Used Cars. To wit: dealers of right-hand used cars are also selling left-hand drive models.

Also driving showroom numbers up is that people who were only investors in other outlets have now opened their own facilities. "Sharjah is now the major market for left-hand used cars as we are not only getting local customers, but also buyers from the GCC, and farther afield." He added that even right-hand used car dealers are selling more left-hand used cars imported from Japan.

"Right-hand used car customers are now divided between markets in Dubai and Sharjah. The Dubai market gets most of its customers from Africa, while Sharjah gets the majority of Pathan customers from Afghanistan," noted Ahmed.

He pointed out that the ban on the export of cars to traditional markets like Pakistan and India had earlier affected the business. Meanwhile, the left-hand car market in Sharjah draws customers from Pakistan, India, the Arab world and other countries, while the right-hand used car market is dominated by Pakistani buyers.

But compared to the 1994-95 peak, unit sales of right-hand used cars have fallen 50 per cent, while competition has intensified due to the surge in the number of dealers. major obstacle is the acute shortage of parking space.

The authorities have, however, pleaded helplessness in the face of the burgeoning number of used car firms and the rising number of residential buildings in the area. Observers say the problem has risen due to the unplanned and untrammelled growth of the industry in Abu Shagara, essentially a residential area.

They note that dealers were easily accommodated in the early stages, and that even as late as 1994, the number of right-hand used car dealerships totalled only 35. But by end-1996, the number had grown to 80, before surging to some 200 companies by 1998.