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The demand for used cars has increased by 15%.
By 2021, the UAE’s demand for used cars has entered the fast lane, with an increase of up to 15%.
The weak economic sentiment has prompted UAE residents to choose more affordable vehicles; during the pandemic, more and more motorists also tend to ride in their vehicles.
Local auto industry executives said that high digital penetration and strong government measures to stimulate the economy have also promoted high demand, resulting in insufficient supply in the used car market.
“The growth rate of the used car market is between 10% and 15%. We see good demand in the domestic market and export sales channels. The current problem is the lack of available cars in the market, which makes it difficult to meet the growing Demand,” said Axel Dreyer, CEO of Galadari Automotive Co., Ltd.’s automotive division.
He said that the effective measures taken by the UAE government to stimulate the economy have promoted a good recovery and related demand for the mobility of existing and new residents of the UAE.
“Especially new residents are looking for economical vehicles that can meet their transportation needs.”
Abhinav Gupta, CEO of Cars24 Gulf Region, reported that used car sales have achieved double-digit growth. These are driven by economic openness, Expo 2020 Dubai, and increased online purchases due to high digital penetration and weakened economic sentiment related to job security.
“For several years, the market has stagnated between 700,000 and 800,000 vehicles. But the way the market recovers and the way the government manages the lockdown, we think the UAE is ahead of most markets. In the next 2-3 years, this market It should break the one million mark,” Gupta added.
The CEO of Cars24 stated that the online car platform was launched in April 2021 and has now developed into the second largest car seller, and will become the largest car sales platform within a month or two.
Gupta added that they sold about 350 units in July, and he expects to sell more than 500 units in August. Cars24 is expected to sell 3,000-3,500 vehicles throughout the year.
What is the driving demand?
Gupta pointed out that the weakening economic sentiment about unemployment, wage cuts and the inability to get a raise, and drivers’ perception of safer and more viable travel options are driving demand for used cars. The shift from taxi users to privately owned cars adds to this trend.
He said that at least 30% of users responded that they wanted to switch from taxis to private cars due to Covid-19 safety considerations.
Residents’ demand for second-hand cars for family or personal use has also increased, adding that the new car segment and partial disruption of value for money have also pushed the market into a double-digit growth matrix.
What kind of used cars do residents like?
Axel Dreyer said that the small car market is in great demand, and there are always customers waiting for compact sport utility vehicles (SUVs).
He said: “The customer is concerned about a reliable car with a history of service and a warranty, which will ensure that he has a worry-free use for a period of time. Therefore, customers are more willing to buy through agents and mature dealers.”
Abhinav Gupta of Cars24 said that the UAE market still likes Japanese and Korean brands. Both occupy a dominant market position, and their market share is only growing.
“Another important trend we have noticed is that the demand for SUVs is growing much higher than before Covid-19, but sedans are still the first choice for more affordable market segments below AED 50,000. Approximately 40% of the market There is still a budget of less than AED 50,000, but the segment of AED 50,000 to AED 100,000 has grown and now accounts for 30% of the share, and is more driven by SUV demand,” Gupta said .
He said that the price of used cars between AED 50,000 and AED 100,000 has risen by 20% to 25%; that portion has increased from 20% to 25% to 30%.
Wahid Abbas
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