American Imports Are Cheaper And a Thriving Business In Dubai

"Baber K. Khan" (beekay)
06/29/2014 at 17:58 • Filed to: None

Its hard to stand out with a car in Dubai. Camrys and Kia's look like plastic boxes. Many people then go for botched plastic surgeries on their cars but that too sucks, mostly looks awful but ostentatious. You're bound to look at them regardless of what you think. But there's more.

Even in UAE, the artificial paradise of concrete and oil but driven by ambition, the cars aren't cheap to buy new but on paper, UAE is a tax haven but you get to just open a shop to set up business (which I am here for), just for your understanding, there are taxes for everything. Even for styles of sign boards you're going to put. Then if you're opening up a mobile shop, you have to list and pay taxes on the activities you're go to do here. For example; a mobile shop may deal in repair and trading (buying and selling), you'll have to pay taxes for each of that activity.

But the biggest cost is the rent, you can only choose an arabic name which has to be approved by the municipality (Baldia). So if you see GAP here, they're paying an additional fee for using that brand name which is registered to a company whose name is in Arabic. Then the rent, when my brother was looking for a shop here, a simple and small kiosk in a relatively small mall costed 180,000 AED per year in Dubai and was subjective to mall's management approval. But still these businesses make an awful lot.

Thus is the business of cars in UAE, there are lots of taxes once you begin to follow your ambition of setting up a business. The GCC spec cars are priced above what you get in the States. American imported cars are cheaper but do they hold value?

Form what I've observed, despite people importing them from US and selling them here individually and making handsome money as a side business, people are hesitant to buy them. Chief among various factors is resale and the state of its condition.

Let's begin with condition: UAE has moved most of the automotive market outside the cities. But, if you think your car was named totaled by the insurance people, chances are very good that it was then brought here, repaired to be new and put up for sale in the market.

Not totaled but you put it up for trade for a new car, chances are again that it will come up here for sale.

The difference in price is quite handsome. The difference between American import Lancer Evolution and a GCC Evo of the same year would be roughly around 20-30K AED.

The reason for this is quite straight: A GCC Base model would have more features and numbers than an American Spec mid-loaded car. The other being the lack of trust on the dealers and individuals who are importing from the States.

Dubai was one of the fastest growing car markets in 2013 and when you step out on these massive road where traffic is clogged up during rush hour, you'll see it with your own eyes. If you're at an income of 8-10K AED a month, you could easily lease out a new Charger, Camaro, Mustang and the lot if you think 2K a month (including lots of free stuff such as insurance, extended warranty and parts support, etc) is affordable. There are advertisements all over UAE for the new Panamera for just 3K AED a month as part of their special Ramadan deal.

PS: Information source: I've just begun to study the market since I have not much to do and few friends who are in the leasing departments of major western banks .

View is from my room's window in downtown Abu Dhabi.

DISCUSSION (7)

desertdog5051 > Baber K. Khan
06/29/2014 at 18:04

Great article. What is the exchange rate of the AED vs the USD?

Baber K. Khan > desertdog5051
06/29/2014 at 18:15

3.67 AED for one USD according to Google.

desertdog5051 > Baber K. Khan
06/29/2014 at 18:25

Aren't you a native of Pakistan? Or did I miss that by a country. I would love to visit that part of the world and have a competent guide/interpreter. The culture is so old yet so changing.

Baber K. Khan > desertdog5051
06/29/2014 at 18:32

I am Pakistani. I just came here to UAE to help my elder brother who is setting up a small business here and also do some automotive career hunting while I am here.

You're always welcome. I just came back from a trip to the Karakoram Highway , two days, later, bro call me here. I can accompany you and we'll get a guide. Hah! I am a laid back person.

desertdog5051 > Baber K. Khan
06/29/2014 at 18:35

Thanks man.

gmporschenut also a fan of hondas > Baber K. Khan
06/30/2014 at 00:19

There are Ramadan deals? Does Lexus do a whole series of stupid commercials? I'd love to get Automatch Tom's view on this.

Baber K. Khan > gmporschenut also a fan of hondas
06/30/2014 at 18:46

Yeah. There are. But the biggest deals and discounts come during DFS (Dubai Shopping Festival).