Transshipments of vehicles into the region has seen a marginal increase recently after dropping by more than 70 per cent in 2009.
The automobiles industry as a whole is witnessing some upward movement during the last three months and by the end of this year will return to 2007 levels, said Peter Tay, Operations Manager at Automotive Logistics, one of the largest third party logistics (3PL) operator for automobiles in the region.
Speaking to Emirates Business, Tay said that large 3PL companies are the worst affected by the global financial crisis.
Business in his company dropped significantly since the new facility began operations in the Jebel Ali Free Zone in 2009 beginning.
The company mainly focuses on pre-delivery inspection (PDI) on new vehicles, transshipment PDI, accessories and special equipment up fitment, and even conversion works. It is a joint venture project of DP World and Al Ghaith Group.
"Automotive logistics was set up with the intention of providing a comprehensive automobile service centre for car importers in Dubai, including the governmental institutions and humanitarian organisations as a one-stop shop to cater to all their needs within the region.
"The new facility in Jebel Ali has the capacity to handle around 3,500 units annually," said Tay.
According to him the company is targeting just around 20 per cent of the transshipments of vehicles for PDI.
"The Jebel Ali port normally handles about 120,000 units of transshipments of vehicles. More than 30 per cent of new cars supplied to the region goes through Jebel Ali. However, the number drastically reduced during 2009. There was hardly any movement between June and September last year," Tay added.
"The situation during the last three months has slightly improved. We are witnessing some movement of shipments. If this trend continues the year should end on a positive note," he added.
According to Tay, the company is looking at about 20 to 25 per cent of the transshipment business. "None of the major manufactures have any PDI centres here, so they mostly depend on their distributors. When the movement was brisk the distributors did not take up any of the PDI jobs in order to concentrate on after sales services," he said. "Whereas PDI business has generally slowed down because dealers have spare capacity and so in an effort to cut costs they are doing everything in-house. Our current situation is that when the economy slows down we are the first to be affected. The situation is very difficult," he added. The company has a technical centre with a capacity of 118 work bays.
"We have managed to work on special projects during the last three months. We have recently received enquiries from dealers. We are also negotiating for three contracts, one each for the Red Cross and Oxfam," said Tay. The volume for Red Cross varies between 800 to 2,000 units a year. But there is a lot of work that is required to be done on their vehicles.