30 Nov 21

Fleet sales on the rise again in UAE

Fleet sales are on the rise in the United Arab Emirates, the result of improving business confidence, reports Gulf News. The trend tracks a general increase in vehicle demand, thanks to a jump in consumer confidence. 

The publication cites Michel Ayat, CEO of AWR Automotive, dealer for the Nissan, Infiniti and Renault brands. “We are already over the 50% mark in fleet sales, driven by strong confidence.”

Private leases

In other words, fleet sales make up more than half of AWR’s total sales for the year so far. This is driven by demand from traditional fleet operators, including rent-a-car companies and lease companies. 

However, the trend is amplified by the growing demand for private car leases, often via digital portals. Even though the customer for this segment is the private market, the fact that the vehicles are offered via leasing ensures that they are counted as fleet sales. 

According to Mr Ayat, the recovery of corporate vehicle sales in the UAE is surfing on the back of increased consumer confidence, with spending “almost matching pre-Covid times.” Slow sales in the first quarter were followed by perked up demand in Q2 and a ‘deluge’ in the third quarter. 

Delayed purchases

He speculates this was due to fleet operators, who had delayed their purchases for most of the year, finally taking the decision to renew their fleet before the Expo, which opened in October, which led to the busiest month in terms of new vehicle sales in the UAE since the outbreak of the pandemic. 

However, the resumption of fleet sales at a robust, pre-pandemic level is hampered by the same impediment that affects fleets elsewhere in the world – supply issues, caused in large part by the semiconductor shortage. Another important factor: a rise in shipping rates, which will ultimately be added to the vehicles’ ticket price. 

Nevertheless, when the year closes, the UAE new car market is projected to have reached 183,000 units. That’s about 20% more than the 152,000 units of new vehicles sold in 2020. If that positive trend continues, the UAE new car market could easily pass the 200,000-unit milestone in 2022. 

Image: Shutterstock

Authored by: Frank Jacobs