Dubai: The used-car market at the Dubai Cars and Automotive Zone (Ducamz) has nearly stopped since Dubai Customs introduced a new data collection system for free zone transactions.

The new system, called Mirsal-2, asks for a lot more information from used-car dealers, much of which they don’t have.

“Mirsal-2 doesn’t work for us. It’s hard to run our daily business because we lack the right information and knowledge about the system,” said Ali Asghar, managing director of Cougar Motors.

Many used-car dealers met with government officials on Sunday at Ducamz to question why Mirsal-2 is necessary. Customs officials explained that the new system aims to stop illegal shipments, fraud, and smuggling.

“In trying to collect more revenue, the system is hurting the industry,” said Athar Seddiqi, managing director of Unique Motors, a showroom in Ducamz. Under Mirsal-1, only six questions were needed for sales, but Mirsal-2 requires 25 to 40 questions.

Delays

The import and export process is delayed, causing financial losses for dealers.

“I’m worried to go to my showroom because I sold many cars last week but can’t get the export papers,” said Rizwan ul-Haq, managing director of Haq International Motors. “Customers want their money back.” Ducamz, which spans eight million square feet and has around 400 dealers contributing about Dh210 million to the city’s economy, is run by Dubai World’s Jafza and Dubai Customs.

Created under the vision of His Highness Shaikh Mohammad Bin Rashid Al Maktoum, the free zone has become one of the largest in the world.

Mainly for re-export, used-car sales grew from 3,000 to 25,000 cars per month in the last ten years, but the new system has dropped that number to 10,000, dealers say.

Asghar mentioned that because of the business difficulties, 150 showrooms from Ducamz have already relocated to markets like Africa. “If this continues and the government doesn’t notice this serious problem and change Dubai Customs’ approach, the remaining 400 showrooms may also have to look for better options, and that’s their right,” he said.

Fines

Dealers are facing many fines for not providing all the required transaction details, which is hurting their profits.

“We don’t have the information the new system asks for, like how the car will be shipped. That information comes from the customer later,” Haq said.

“If we create documents with incorrect information, we can face big fines. So, we are worried about working,” he said.

Nasser Mohammad Shafi, manager of International Automotive Motors, said: “I come here to do business, not to argue. I sold 20 cars last week, and the customer is fighting with me to finish the export papers. I can’t help because I don’t understand Mirsal-2.”

“I sold a car for Dh3,000, but I’m paying Dh5,000 in fines to customs. Is that fair?”

Dubai Customs officials did not reply right away and were not available to comment later.