Used car dealers moving to Sharjah’s auto city complain about high rents

Dealers say they will have to pass on cost to customers, with some car brands increasing in price by as much as Dh5,000.

Used cars on display outside the shop of used car dealers in Abu Shagara area in Sharjah. Pawan Singh / The National

SHARJAH // Use car dealers who are being forced to move to a new area to sell their vehicles have complained that rents are five times what they previously paid.

Many said they had no choice but to pass on their increased costs to customers as they tried to make ends meet.

Dealers based in the densely populated areas of Abu Shagara and Abu Danig were told in September by Sharjah Economic Development Department that they must move to the new, purpose-build car area in Al Riqa Al Hamra, near Sharjah International Airport, by the end of the year.

The ruling affects more than 400 used car businesses that often occupied the ground floors of residential buildings. They raised complaints from residents about noise and difficulties in finding parking spaces.

Dr Sheikh Sultan bin Mohammed Al Qasimi, Sharjah’s Ruler, approved a plan to relocate the car dealerships to the Dh150 million site in 2013.

Iraqi W L, who opened his business in 2010 in Abu Shagara, has rented a shop at auto city but he was finding it difficult with the new overheads.

“I had to rent it out because we were given notice to quit by the end of the year to the new location or we will face legal action,” the 52-year-old said.

“The new rent is Dh245,000, while I pay Dh50,000 here in Abu Shagara.”

He said he would have to increase prices just to break even. “If I need to stay afloat, I have to raise the prices of cars – some brands will see an increase up to Dh5,000,” he said.

The businessman said that if auto city did not generate the income he hoped, he would have to close shop and relocate to another emirate.

Iranian businessman M M said the move to auto city would be costly and that the prices of cars would have to increase to counter the increased expenses.

“The move is inevitable. We have to calculate the new costs and add them to the price of the vehicles, which will eventually be picked up by the customers,” he said, adding that he had signed a three-year lease at the new facility and that he would see how the market shaped up.

“If the market is down, we will have to lower the prices to be able to survive, or else we will be operating at a loss,” he said.

Another businessman, A F, 44, said: “My partner and I are still figuring out the new costs, and how to offset the new expenses, but a price increase is something unavoidable at this stage.”

Residents, however, were looking forward to the car dealers’ departing.

Abu Shagara resident Yousef Ahmad, 33, from Egypt, said: “The neighbourhood is waiting for the year to end as the move will bring serenity and enough parking spaces for the residents without the need to drive endlessly to find a parking spot.”

Auto city has 415 premises divided between dealerships, car accessories and tyre shops, with more than 80 per cent of the premises already rented out, according to Sharjah Asset Management, which operates the area.