Shortage of cars hits car rental market in UAE

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Car rental companies run short of cars in the wake of catastrophes in Japan. Post tsunami and earthquake there is a sharp decline in the production of cars by Toyota. Leasing companies recommend switching to other models such as Mitsubishi and Nissan models that are manufactured outside of Japan.

Al-Futtaim Motors, exclusive Toyota dealer for UAE, has hiked the prices for Toyota models and also said that the delivery would be only after September. Toyota is a major seller of cars in the UAE. It is also popular among car rental companies due to its resale value. Budget Rent A Car buys about 900 Toyotas from Al-Futtaim Motors, but after the massive earthquake and Tsunami that hit Japan, they have purchased none. Al-Futtaim Motors experienced a slowdown in their business but managed to sell across all channels. The company receives half of the Toyota models from Japan while the remaining half from other countries in Asia, the US, and Australia.

Japanese manufacturers were forced to shut down production in the wake of disaster. According to Japan Automobile Dealers Association, the domestic sales have come down to 51 percent compared to the previous year. Analysts predict a shortage of parts as main issue affecting the production.

 

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