New car sales overtaken by fleet sales in UAE

14 Nov 2019

Sales to Careem and Uber operators as well to car hiring services such as udrive and ekar have had a huge impact on car sales in the United Arab Emirates in 2019.

Taxi services and government departments have also placed orders on behalf of their fleet operations, and even with some weeks left to go in the year, sales have unmistakably overtaken the number of new car sales to individuals this year.

The CEO of Dubai’s Arabian Automobiles, Michel Ayat, says that the shift is as much as 60/40 in favour of fleet sales at present, where once those figures were the exact opposite.

However, he points out that the shift has been coming for a while, with fleet and individual sales being more or less tied last year.

Overall, new car sales in 2019 in the UAE are likely to end up being somewhere between 250,000 and 260,000 units, essentially the same as in 2018.

25% of those sales usually end up in markets outside the UAE, a statistic that has been generally common for many years with the exception of the recession-hit 2009 to 2011 years.

Fleet purchases are not just adding to existing figures in a difficult car sales environment.

Early predictions for car sales in 2020 in the UAE are seeing either flat growth or an increase of 3% to 5% over this year if current trends continue.

The most visible fleets are those of Uber and Careem (which are essentially the same since the local rival was purchased by Uber for $3.1bn in March).

One of these limousines will be in the neighbourhoods of Dubai at any time of the day or night, with the car of choice continuing to be the Lexus ES.

Other dealerships are, however, now working hard to ensure that they can become part of this prospering market.

The Uber-Careem numbers seem destined to only increase still further with Expo 2020 Dubai on the horizon, and dealers are counting on that fact to keep them afloat as the recovery of individual sales takes more time.

Ayat notes that bank lending to individual customers has fallen between 2015 and this year, and many people still doubt their job security – factors that are unlikely to increase individual new car sales anytime soon.

Dealers do, however, have plenty of reasons to believe that the current strength of fleet demand will continue.

Paying to lease cars by the minute is another growing trend being allowed by these platforms.

These services are part of the mobility revolution that is currently taking place in the UAE, according to the CEO of Lotus retailer Adamas, Karl Hamer.

However, Hamer doubts that the changes will have too much of a negative impact on car ownership figures in the UAE, and believes that the new forms of mobility will be able to exist together with traditional ones.

Anyone driving any form of motor vehicle in the UAE still needs to take out car insurance.

Car insurance defends drivers against the financial cost of accidents and other issues such as car theft.