They confirmed a gradual improvement in the demand for used car sales

Merchants: We are facing challenges due to Coronavirus, the increase in competition, and the decline in bank financing

• The auto market is witnessing competition with agencies as they offer buying facilities to consumers.

  Photography: Ashok Verma

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Officials at used car trade fairs confirmed that the markets have recently witnessed gradual improvement in sales rates that ranged between 5 and 10%, due to the return of economic activity in the country, the resumption of air travel, and the return of residents from abroad.

They indicated to Emirates Today that they are currently facing some challenges related to the repercussions of the Corona pandemic, most notably the decline in export rates for some markets, in addition to challenges related to the high level of competitiveness in the markets, due to the expansion of sales to individuals on social media pages, and increased competition. With agencies, in light of their offering to facilitate the purchase of new and used cars, as well as challenges in obtaining financing from a number of banks due to market conditions.

Gradual improvement

In detail, the director of the "Al-Yamamah Used Cars Trade" exhibition, Mustafa Al-Hassan, said that "the markets have recently witnessed gradual rates of improvement, rates exceeding 5%, with the resumption of economic activities and the return of residents from their countries, and some citizens and residents went to buy, but the markets did not return to Its previous rates were before the outbreak of the (Corona) pandemic. ”

He added that “it is expected that sales will improve gradually, and more during the winter season,” indicating that “a number of exhibitions are currently facing challenges related to the pandemic, and they are concentrated in declining export rates, with the weak demand of merchants from some countries to import cars to their countries similarly to the previous periods. The repercussions of (Corona), as the export movement for exhibitions decreased by 80%, compared to the pre-pandemic periods.

Al-Hassan explained that «other challenges currently facing the sector are: the high level of competitiveness in the markets, through two paths. The first relates to increasing the movement of individuals to sell or buy their cars through social media pages, instead of resorting to exhibitions, and the second track includes increased competitiveness. From agencies, by offering facilitation offers for new and used cars.

Sales movement

In turn, Mustafa Mahmoud, the sales official at Exotec Used Cars Trading, said, "The sales movement recorded a gradual improvement during the recent period, with rates reaching 10%, as an effect of the resumption of economic activities, the return of a number of residents to the country, and the resumption of flights." .

He added that «the exhibitions are currently facing challenges related to the repercussions of (Corona), and they are concentrated in the low demand of merchants imported from abroad to buy cars and ship them to their countries, and that some of the purchases are currently limited to some merchants using intermediaries of their nationalities residing in the state, to agree to buy some cars and ship them.

Mahmoud pointed out that «most of the import operations in the market take place from countries such as the United States, Canada, South Korea, Germany and Britain, while re-exports of cars are concentrated in the markets of Iraq, Nigeria, Ghana, Congo, Myanmar, Eastern Europe, and some limited export operations. To some Western European countries ».

He explained that «import operations are carried out for cars by entering exhibitions for auctions that include cars of various types, and they are shipped to the country and sold according to the specifications within the country.

Mahmoud considered that «the most prominent current challenges are concentrated in the increase in competition on the part of social networking pages, in terms of selling and buying cars through individuals. This is what some exhibitions face by intensifying promotional advertisements on those pages, with annual contracts to promote on websites specialized in the auto trade. .

He pointed out that «some exhibitions resorted to face the repercussions of (Corona), and the decline in demand for luxury cars, by focusing more on the import and purchase of cars of salon quality for the middle and low price categories.

"The challenges also include a decline in exports to some countries in the region," he said.

The repercussions of "Corona"

For his part, the director of the «Al-Basha Used Cars Trade» exhibition, Ahmed Hamad Al-Shamsi, said that «the repercussions of (Corona) have had major effects on the sales of the used car trade sector, although in the recent period it started to gradually improve, at rates estimated between 5 and 10% compared to By the end of the first quarter of the year, however, it still did not reach the usual general levels during the past year, as monthly sales currently ranged between 5 and 10 cars, compared to sales that ranged between 50 and 60 cars last year.

He added that "the limited improvement in sales could be due largely to the return of flights to different destinations, in addition to the return of residents from abroad," pointing out that "the exhibition allows transactions of selling cars in installments through bank financing, and obtaining documents required by banks."

He explained that «the most prominent challenges facing the used car trade fairs during the current period are concentrated in the decline in export operations, with some merchants from different countries not preferring to travel to buy cars, in addition to the refusal of banks to a number of purchase transactions in installments, which makes it difficult to buy in installments through the bank. Establishing a condition that the sold car model not be before 2014. »

Used cars

For his part, the General Director of the Nasser Motors Corporation, Jamal Nasser, said, “The activity has started to return to the used car sector now gradually, after the movement decreased by more than 70% during the first months of the Corona pandemic.”

Nasser explained that the behavior of used car consumers has changed after the pandemic, as they have begun to separate used cars of small and medium sizes, which generally have less fuel consumption, with the aim of reducing the cost that the consumer bears on a monthly basis.

Nasser pointed out that the demand for used car exhibitions had declined before the pandemic in general, due to the concentration of sales on the Internet and through social media, which affected the exhibitions a lot, by up to 90%, which prompted large exhibitions to open platforms and websites for sale.

He attributed the consumer demand to sell "online" to the fact that the prices of used cars on the Internet are lower than the showrooms, especially since the exhibitions bear several costs that the "online" sale does not bear, such as the rent of the exhibition and the wages of employees.

For his part, the general manager of "Al-Attar Used Cars" company, Youssef Hussein, said that "there is a decrease of up to 30% in the sale of used cars during the Corona pandemic," indicating that the recent period witnessed the beginning of a gradual return to activity in the sector, after the lifting of the ban and restrictions on Movement, and reassurance of strong precautionary measures on the part of various institutions.

Hussein explained that the decline is due to several factors, most notably the measures taken by private companies to reduce the salaries of employees or lay them off, and the reluctance of banks to finance the purchases of used cars for some groups during the pandemic, which led to a decline in the importance of buying cars, and considering buying cars a (luxury) For some individuals.

He pointed out that the "pandemic" led to a change in the behavior of used cars consumers, as a number of consumers resorted to buying used cars for cash, after banks were reluctant to finance, which led consumers to prefer buying old used models instead of new used models. Such as 2020 and 2019, due to its cheaper prices compared to other models.

He emphasized that buying in cash, instead of bank financing, led consumers to buy used cars with smaller capacities in the engine, as well as buy smaller cars, so that they could finance them with cash.

Hussein pointed out that there is great competition between used car shows and online selling, pointing out in this regard that some consumers still prefer to buy from showrooms rather than online, due to problems arising in some online sales. After consumers notice that there are huge differences in vehicle specifications and actually condition from their specifications online.

In the same context, the director of the "Desert Line" car exhibition, Ahmed Zaidan, said that "the first four months of the outbreak of the Corona pandemic witnessed almost a halt in the sale of used cars, but that the movement began to gradually return during the recent period." The movement to what it was before "Corona" needs some time, especially after companies have reduced the salaries of employees or dispensed with them, as well as the absence of incentive offers to finance the purchase by some banks, and the lack of funding for many groups in private companies.

Zidan pointed out that most of the sales of used cars are currently focused on buying economic and small used cars, which generally have less fuel consumption, indicating that 90% of the purchases of used cars are carried out in the current period through social media, which constitutes a great challenge for the exhibitions.

Used car market

Director of Marketing and Sales at Al Masoud Motors, Kyle Gillam, confirmed that "the used car market, approved by the agency, is witnessing a significant turnout now, given the price of the car acceptable by the consumer, compared to the quality it enjoys." He explained that "approved" used cars by agencies constitute An easy and reliable choice for those looking to own a used car backed by the standards and features of new cars.

Gilam explained that Al Masoud Motors has witnessed a noticeable increase in applications to purchase used cars through its digital applications, stressing that this increase has not negatively affected the new car market, as the relationship between the new car market and approved cars is a close partnership relationship, and forms part of The agency's priorities in meeting customer requirements, and providing the products that the customer want, whether it is a new car or certified agency guaranteed.

Mustafa Al-Hassan:

"The export movement to exhibitions has decreased by 80%, compared to the periods before the (pandemic)."

The expansion of sales to individuals on social media pages, and increased competition with agencies.

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