5 Things To Consider Before Opening A Car Dealership in Dubai

01 Nov 2022 Helpful Tips

Are you thinking about opening a Car Dealership in Dubai? Opening a Car Dealership is both an exciting and challenging experience. When it comes to opening your very own car dealership in Dubai, there are a few things you need to consider first.

Here are 5 Things You Need to Consider Before Starting a Car Dealership in Dubai.

1. Location is key

As the saying goes… Location! Location! Location! If you are looking to start a car dealership in Dubai, the location you choose will determine whether you are successful or not. To be successful selling cars, you need to choose a location that is viable for your dealership and generates high foot traffic.

Before you consider opening a motor dealership in Dubai it is important that you research potential locations first. Put together a short list of a few locations that you are interested in, and you think may be applicable. Visit those sites and see what option will give you the best positioning and space.

When it comes to location it is important to consider your future plans. You need to ensure the location that you choose gives you the ability to scale and grow. The last thing that you want to do is choose a location which is either too small or too big. Either option will hurt you as you begin to scale.

Related Article: How UAE Car Dealerships Can Grow.

2. Understand the Customer

This point is so important! Before you consider opening a Car Dealership, it is so important that you understand your intended customer and potential demand. How are you going to acquire customers? Are you going to use vehicle advertisers? What type of customers are you looking to acquire? these are some of the questions that need to be answered prior to beginning.

It is important that your dealership does the appropriate research into the current market and common customer acquisition costs. See how much vehicle advertisers are going to charge you to advertise your vehicles, investigate online marketing costs and put together a plan that outlines how you are going to acquire customers and what your target customer is.

Related Article: 5 Best Marketing Strategies for Motor Dealers in the UAE.

3. How Are You Going to Source Vehicles to Sell?

The biggest challenge facing the UAE Motor Industry in 2022 is Vehicle Stock Shortages. Many dealers cannot get their hands on new vehicle stock to sell due to car production delays and astronomical used car prices.

Before you consider opening a car dealership you need to figure out how you are going to source vehicles to sell. Are you going to source cars directly from the manufacturer? Are you going to purchase vehicles from an auction house? do you already have vehicle to sell?

It is important that you put together a plan on how you are going to consistently source vehicles to sell? The last thing you want to do is open a dealership and have no vehicle to sell.

Related Article: How Car Dealers in the UAE Can Source Vehicle Stock in 2022.

4. VAT Requirements

A mistake that so many Motor Dealers in the UAE make is not understanding the VAT requirements for car dealerships. VAT for Car Dealerships differ greatly to everyday VAT in the UAE. As such, your dealership will need to implement a solution that helps you complete VAT and trade compliantly.

It is recommended that you learn and understand the Motor dealership specific VAT laws in the UAE before you start a dealership. There are tools available to Motor Dealers in the UAE which automate Dealership VAT and reporting.

Related Article: How UAE Motor Dealers Can Automate VAT Compliance.

5. Staff

Staff will play a huge role in determining whether your dealership is successful or not. It is important that you consider what type of staff you need and how you are going to go about hiring them.

Hiring staff is not an easy job, you need to recruit, on-board and train. Before you start a dealership, it is important that you understand your staff requirements and the associated costs. It is always best practice to bring your staff on board a few months prior to launch to get them trained and confident in their roles and responsibilities.

Related Article: How UAE Car Dealerships Can Reduce the Impacts of a Staff Shortage.

Final Word,

Opening a Car Dealership in Dubai is a rollercoaster experience. To minimize your risks, it is important that you understand the market, research accordingly and familiarize yourself with the industry and how it operates. The 5 things presented above need to be considered before opening a car dealership in Dubai.

We hope you enjoyed reading this article. To read more articles like this, please visit the EasyCars latest news page here.

About EasyCars,

EasyCars by Jeal is a UAE Motor Industry Specific, Dealer Management Software that automates the daily tasks of running a motor dealership. Using the latest technologies, EasyCars removes frustrations experienced at the dealership - opening the doors to future growth.

EasyCars features include Simple Stock Management, Automated Advertising, Automatic VAT Calculations, Xero Accounting Integration, Facebook Automotive Inventory Ads, Dealer Websites and Business Reporting in the one central management software.

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