Drop in vehicle sales augurs well for car rental companies

Some UAE car hire companies say business is increasing as people who cannot obtain loans to buy vehicles because of the banks' stricter lending policies rent instead.

However, not all operators are benefiting – and the luxury end of the market in particular is suffering because of the economic slowdown.

Dollar Rent A Car is expanding its presence in the UAE by opening three new offices – two in Dubai and one in Abu Dhabi – to make a total of 21. The existing workforce of 135 will be increased. "Our expansion plan in the region will continue to gain momentum with the opening of new locations in Dubai and Abu Dhabi," said Marwan Almulla, General Manager of the company's UAE division.

"The UAE is a popular destination for tourists and continues to be home to many expatriates as well as nationals. Car rental is especially important now as banks are becoming stricter over their lending and consumers are unable to obtain credit to buy cars. Long-term rental offers an economical and reliable alternative.

"We cater to inbound business, leisure travellers and the corporate automotive leasing market in the region."

George Khalil, Sales Operations Manager of Europcar in Abu Dhabi, said: "Bad news elsewhere has meant good news here when it comes to the car rental market. Our rental operations have really benefited from this crisis so far this month and over the past three months.

"In the past, when we had 100 cars available only 60 were rented. Now it is at least 80 and we expect this to go up over the next few months."

Europar has a fleet of 1,000 cars in Abu Dhabi.

However, Sayyed Al Masri, a customer service representative at Abu Dhabi-based luxury rent-a-car operator Al Assad, said: "We rent out cars such as Bentleys, Range Rovers and Porsches and have seen a drop in reservations of up to 70 per cent over the past few weeks."

Mazaher Zaki, Manager of Avis' operations in Dubai and the northern emirates, said: "Our long-term leasing business has declined by 20 per cent so far this month compared to the same period in 2008. To be realistic we do not expect to see growth towards the end of the quarter over what we reported last year. But we hope things will rebound close to last year's level."

Avis has a fleet of 8,000 cars in the UAE market – 60 per cent in Dubai and the northern emirates and 40 per cent in Abu Dhabi.

Zaki described the company's performance in the last quarter of 2008 as "excellent". "Our business was not affected towards the end of 2008 and exceeded our earlier predictions.

"All our reservations for that period were confirmed by tourists who planned to visit the UAE via Dubai, whether for business or a holiday.

"We are optimistic as the Dubai and federal governments are standing by the different business sectors. The UAE is and will remain a unique destination in the region."

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