UAE car dealerships suffer coronavirus slowdown

12 Mar 2020

Sheshan Gautham, a dealer of luxury cars in the United Arab Emirates, has had an underwhelming beginning to 2020, with almost two-thirds of January bookings from Chinese clients being cancelled because of the outbreak of coronavirus.

His company, Uptown Rent A Car, managed to deal with the hit, and Gautham believed that the worst might be behind him, but now his largest source of customers, Saudi Arabia, has this week cancelled flights to the UAE in a bid stop further spread of the virus.

Although Lamborghinis are loved by the Chinese, Gautham, who runs a dealership in the glitzy downtown area of Dubai, says that Saudi Arabia is his company’s largest market.

There are 120 motor vehicles at the car dealership, including Rolls-Royces and BMWs that can be rented for up to Dh8,000 per day, and is situated near the Burj Khalifa skyscraper and the Dubai Mall, which attract millions of tourists.

Gautham says that as a large company, it will be stable if the cancellations only have a relatively short duration of between 15 and 20 days, but if the situation persists until the May Muslim holiday Eid, the company’s business model may have to be restructured.

Uptown Rent A Car is one of a number of businesses that are reliant on tourists coming to Dubai.

All of these businesses are hoping that the current international health crisis will be over by October, when the emirate’s Expo 2020 world fair is due to begin.

Organisers believe that approximately 11 million visitors will be coming from overseas to attend the Expo, which is seen as being a showpiece for business, culture and technology and should have pavilions from as many as 192 different countries.

Concerts and other events are also scheduled to take place over the course of the Expo’s planned six-month run, and organisers say that preparations are still on track.

A spokesman for the Expo told Reuters that organisers are in close consultation with local authorities as well as the International Bureau of Expositions, which is located in Paris, to keep an eye on the evolving situation.

30bn dirhams will have been spent by Dubai on infrastructure projects related to the Expo by the close of the fair, which is set to run into April next year.

Gautham is not the only owner of a luxury car rental firm to be worried by the effect of the coronavirus.

A sales representative at another such UAE firm says that cancellation calls have been received from many customers in Saudi Arabia, which accounts for 80% of the firm’s business.

Emiratis tend to own their own luxury vehicles.

The representative, who wished to remain anonymous, also says that another immediate concern is to find enough Dettol to keep cars clean and safe for his remaining customers.

Anyone who is driving a car in the UAE needs to make sure that they are covered by a minimum of a basic third-party car insurance policy, which is required by law.