UAE automobile sector remains in the fast lane

The UAE automobile sector remains in the fast lane, as the country ranked top globally with more than 25 per cent sales growth in 2012 compared to single-digit growth in major markets. Following the buoyant growth in 2012, industry specialists in the UAE expect another positive year ahead. The credit goes to the country’s leadership for creating a safe environment that brings economic stability, mainly contributed by the tourism, trade and logistics sectors. It is estimated that the UAE’s total industry volume will touch 305,000 vehicles in 2012 compared to 243,000 sold in 2011. Major auto sector players in the country told Khaleej Times that 2012 recorded strong growth — from 20 per cent to more than 30 per cent. Majority of them expect a significant double-digit growth for this year as well. Growth in 2012 Top executives of auto industry say the sector also witnessed huge investment in terms of new showrooms and service centres across the country. Axel Dreyer, general manager, Galadari Automobiles Company, said: “2012 was another successful year for us. There is a very positive development in terms of market growth and general demand, which is supporting us to achieve sustainable growth.” Mazda2 and Mazda3 are in high demand, especially among the growing younger generation, Dreyer said, adding: “Our flagship CX-9 has become one of the well-established 7-seater SUVs in the UAE due to the excellent value for money and modern design.” Mark Kass, regional managing director, Al-Futtaim Honda, said: “2012 has been a year of buoyant growth in new car units with sales up 22 per cent year-on-year.” Michel Ayat, chief executive officer of Arabian Automobiles, said that 2012 saw the automotive market rise by 25 per cent, which led to one of the highest growth rates in the past five years. This was driven mainly by government initiatives, which supported the economy as well as the growing population in the country, Ayat added. “Last year, Arabian Automobiles saw growth that was in line with the market. The launch of new models in 2012 such as the Micra as well as the new generation Sunny and Altima kept the Nissan brand at the forefront,” he said. Alan Carpenter, general manager for sales and marketing at Al-Futtaim Motors Toyota, said: “While the automotive market in 2012 has been as competitive as ever, it has been a positive year for Al-Futtaim Motors. Our business has grown strongly across the retail, SME and large corporate channels and we expect to close the year up by over 30 per cent.” “We have successfully opened a number of new or improved locations during the year, culminating in the launch of our world-class facility at Al Badia at the start of December,” Carpenter added. There is no doubt that the UAE automobile market is dominated by Japanese manufacturers, but other industry players also witnessed strong growth and also claimed significant increase in market share. Tamer Al Hakeem, marketing general manager, Juma Al Majid Establishment-Hyundai UAE, said: “In 2012, we increased our market share by 69 per cent in sales compared to 2011. Hyundai is closing 2012 on a high note, with sales continuing to show the same exciting growth pattern.” Mitkar Samee, marketing manager, Al Majid Motors-Kia, said: “In 2012, we expect vehicle sales to have a modest increase in relation to 2011. The sales of automobiles in 2012 have increased in general and Kia’s by 25 per cent year over year.” The year ahead The industry players are upbeat about 2013 and expect another strong year and more investment in new facilities. “Mazda in 2013 is envisaged with a new look altogether, wait to witness our surprises. Galadari Automobiles is confident that the year will bring higher growth,” Dreyer said. Kass said the company will continue to invest heavily in infrastructure, people, IT and network facilities. “We again have aspirational growth plans for 2013 fuelled by new products and enhanced facilities.” Arabian Automobiles also expects growth for 2013, but lower than 2012. Ayat said: “We expect the UAE auto market to maintain a double-digit growth in 2013, however at a lower rate compared to last year. Our estimate for growth rate in 2013 as at around 15 per cent.” Carpenter said: “We expect further strong growth during 2013 that is supported by further investments in facilities; a full-year contribution from the new facilities opened in 2012, several new or refreshed product launches and the expected growth of a vibrant UAE economy.” Koreans brands also expect continued growth and are also planning more investment in facilities. Al Hakeem said: “We are confident this [2012] growth will continue into 2013. We are planning on continuing our investments following our expansion plans and new thinking strategy that would enable us to increase the Hyundai network across the UAE to reach more customers in future.” Samee said: “We expect the trend to continue and are targeting a growth of 25 per cent in 2013. Consumer tastes are expanding beyond premium segments to include budget and volume brands.” Luxury segment The luxury segment contributed around 12 per cent to the UAE’s total industry volume with 17 per cent growth annually. Ayat believes that the luxury segment will grow in line with the overall market growth in 2013. Kass said both Honda Pilot and Odyssey sales have been a revolution in 2012 given top-line specification of the Touring grade that has excellent features, including cutting-edge satellite navigation and DVD rear entertainment systems whereby value-added price positioning has resulted in conquest sales. The Hyundai luxury segment witnessed strong sales growth compared to 2011. “We are satisfied with our sales volume in this segment. The introduction of our premium or luxury range will support our efforts in elevating the brand and changing customer perception,” Al Hakeem said. “We expect our sales will continue to grow in 2013 by introducing new premium models that satisfy customer image and needs,” he added. From Khaleej Times