The UAE is home to many people who are not permanent residents for one reason or another; almost 80 per cent of the population is expatriate and a good number of those will not reside in the country long-term.
As a result, many people when they first arrive in the country will look to have their own cars, but not necessarily to buy. Car rental can be the perfect option for this category of people, offering them the freedom of mobility without locking them into expensive financing arrangements.
In addition, many businesses may need to have access to vehicles on an infrequent enough basis that does not justify investing in purchasing vehicles, for example the tourism sector. Here there is an opportunity to create relationships with businesses and consumers who want a quick and effective solution to their mobility needs. Here are some aspects to consider if you are thinking about setting up your own car rental business in Dubai.
Location, location, location
Much can turn on the location with any business, but there are certain strategic considerations when it comes to car rental companies. You need to be in a place that is accessible for customers to get to, has visibility and also space to stable your fleet of cars – at this point you may also like to consider whether your chosen premises allows you room to grow. In terms of accessibility, it is best to be positioned in a main arterial route or perhaps close to the airport. However, these locations will be more expensive and therefore may restrict the space you can afford. It may well be worth the extra expense, though, as few customers will be excited to travel to far off locations just to pick up a car and drive it all the way back to somewhere more central, regardless of your price point.
What equipment to invest in?
You should do a thorough business plan well in advance of making any investments in equipment, as it is important to know the size of the market, where the gaps are, and the type of business youa are trying to start. Will you open a small business with specialized vehicles, or do you want to start something that has room to grow? All of these questions will help determine your initial outlay. However, it is suggested that a minimum starting point would be at least 10 cars and space to house those vehicles. You should also have an operational office, with the necessary office equipment such as several computers, landline telephones, printers, water cooler etc. Think also about the cleaning equipment you will need in order to get the vehicles ready for new customers. It may be a good idea to invest in vacuum cleaners and other cleaning products.
You may be entitled to certain dispensations when purchasing cars, such as buying wholesale direct for manufacturers as you will be classified as a ‘fleet owner’. However, it is important to note that UAE regulations require rental vehicles to be upgraded every two years.
It goes without saying that all cars must be insured and it would be an advisable idea to link up with a mechanic workshop so you develop a good working relationship with mechanics you trust, as you are likely to have a steady log of repair needs.
A top team
Human resourcing is a very important aspect of building a successful business. You need to work alongside skilled professionals who you can trust, as the business, especially in the early days when the workplace culture is just being established, is a direct reflection of the workforce.
You cannot start such a business alone, and will probably need a staff of at least three in the initial days – a sales representative, driver and a car washer. How many people you need to hire will be informed by your business plan and goals.
As with many business sectors in the UAE, the rental market can be a competitive field. You need to understand how you will differentiate your business from others that already exist – will it be through price, services or your fleet? – and then you need to communicate that message. Clearly.
There are many different ways to reach your potential customers, starting with the traditional methods such as newspaper, television, radio or billboard advertisements, to leaflet drops and branded merchandise.
However, the online marketing world offers a much more sophisticated and targeted approach to traditional marketing. Get your customers to like and interact with you on Facebook or Instagram, start conversations with them and they will begin to share and like your content. This is organic marketing, and is perceived by most social media users as reliable. You can also look to promote your content and posts on social media sites. Whatever you do, make sure you have a clear identity and message you are trying to share with your customer base.
Customers are increasingly looking for convenience when they look to interact in the marketplace. Most things can be found through the tips of your fingers on your smartphone, while on a morning commute. You want to be certain to have an online presence, and Search Engine Optimization (SEO) is an important part of that.
Try to also optimize your website and payment options for the web. When people can get their desired goods with a few clicks, it makes it much more likely they will do business with you. If they become frustrated with outdated, time-consuming or clunky websites, they are much more likely to click away – and on to a competitor’s page.
Future-proof your business by getting as savvy with technology as you can from the outset, and mark yourself out as a rental car business for now and the future.
|Activity Group: Car rent and passenger transport
License Type: Commercial
Activity Description: Includes firms which rent automobiles for short periods of time, without drivers, to people who do not own their own car, travelers who are out of town or owners of damaged or destroyed vehicles who are awaiting repair.