LOOK-AHEAD 2018: GCC auto sector driven to beat all odds

Dubai - Global brands betting on surging vehicle demand in UAE, offering latest innovations

The UAE's vibrant automobile sector is poised to witness a paradigm shift, with the industry beaming with optimism to welcome 2018 thanks to positive indicators of another successful year. The new year will witness the introduction of smart solutions in the auto sector by leading global brands in the UAE, followed by sustainability being on top of the agenda as the nation encourages a cleaner and green economy.
Global brands are betting on surging demand in the UAE with Expo 2020 Dubai on the cards, coupled with luxury brands cashing on consumer trends in the country. The industry is gearing up by offering the latest in innovation and app-based solutions to offer the masses the latest.
Dubai - most tech-savvy city in the region - has this constant drive to offer new solutions and services to consumers. Popular brands are introducing new strategies not only to remain competitive in the UAE, but also steer ahead of the race to woo consumers.
 
VAT? So what?
As the new year dawns so will the nation welcome value added tax (VAT) from January 1, 2018. However, the new levy may not have much impact.
Sanjay Kalia, CEO of Dana Insurance Brokers, said: "Contrary to the view of the industry slowing down in the first quarter of 2018 - due to VAT - the consensus is that consumers will purchase their preferred brands and do not see the extra tax as hurdle to buy their favourite brand. The larger expat population is aware of the taxes in other countries and the UAE has the lowest tax slab. Besides, the UAE is known to open up for more infrastructure projects it being now a global hub for entrepreneurship."
Echoing the positive sentiment, Axel Dreyer, general manager at Galadari Automobiles Group, the distributor of Mazda in the UAE, said: "We are very excited about the all-new CX-5, which definitely will contribute to a positive outlook for Mazda in 2018. Especially in the popular SUV segment we have with our flagship model, the Mazda CX-9, a class-leading product."
The brand's focus is on implementing new processes to increase customer satisfaction at all touch points through the different purchase and ownership phases. Mazda is also banking on digital and social marketing in order to increase brand awareness.
Dreyer said: "UAE customers are tech lovers and they always want to have the latest technology. We at Mazda are known to defy conventions as we were the first to use the rotary engine in mass production, Mazda invented the best-selling Roadster in the world - the MX-5 and just recently Mazda has announced the innovative SkyactiveX engine concept which basically is a gasoline engine that functions like a diesel engine."
Michel Ayat, CEO of Arabian Automobiles Company and AW Rostamani Group, said: "The automotive market across the GCC and especially in the UAE continues to be in a healthy position, and we believe that 2018 will be another successful year. We expect to see unprecedented development in transportation, telecommunications, public services and infrastructure systems, particularly in the run-up to Expo 2020. At the same time, automotive dealers are investing more and more in infrastructure to enhance the overall customer experience, which is a healthy trend."
Ayat added: "Customer purchasing behaviour will no doubt change in the first quarter of 2018 as a natural reaction to the introduction of VAT. However, we expect the market to stabilise and then grow substantially for the rest of the year, when the market will chart an upward trajectory that will help it reach its normal growth rate."
"Where we have seen a sales surge is for certified pre-owned cars and car leasing. We will continue to enhance this side of the business and we expect it to grow in 2018 and beyond."
The automotive market is forecast to be one of the leading beneficiary sectors of Expo 2020, when healthy sales records are expected to expand the market to over 400,000 cars, which is an all-time high, added Ayat.
 
Sustainable race
The opening of Tesla's first showroom in Dubai serves as a testament to the UAE's drive to make roads greener.
The leading premium electric car manufacturer made headlines in July when it opened the doors to its showroom, which featured its popular Model 3, Model S and Model X vehicles. But while indeed pricey, there is looming interest for Tesla's cars. The showroom will also offer maintenance for the small number of local owners of Teslas across the UAE.
Arabian Automobiles, the first company to sell electric vehicles (EVs) in the UAE, supports the government's sustainability initiatives and is committed to promoting EVs to cut carbon footprints and ultimately shape a greener and cleaner future for the UAE. The company works closely with Renault and Nissan, as well as public and private sector organisations across the UAE, to achieve these goals.
The UAE is also paving the way for fuel cell electric vehicles (FCEVs) and the role they can play in accelerating the green efforts the UAE is making to enable a cleaner air and lower carbon society, in support of UAE Vision 2021.
While FCEVs like the Toyota Mirai are already being sold internationally in places like US, Europe and Japan, it is yet to arrive in the UAE. As part of the government awareness roadshow, Al-Futtaim Motors has been facilitating test drives of the Toyota Mirai in the UAE, and has showcased the technology to over 40 high-ranking government officials. The Mirai was displayed at the Dubai International Motor Show at Toyota stand, as it is the only FCEV available in the UAE. The car, which is being tested on UAE roads will be deployed by Al-Futtaim Motors at a larger scale with government and private institutions, to test the viability of the technology in the local market, while the company grows its network of hydrogen stations across the UAE, following the inauguration of the first one in October 2017 in Dubai Festival City.
Mercedes-Benz Cars Middle East, meanwhile, is adopting "Mercedes me". The concept "Mercedes me connect" is one part of this initiative and includes app-based services where functions can be controlled by a smartphone.
Lennart Mueller-Teut, head of marketing and communications at Mercedes-Benz Cars Middle East, said: "As was the case this year, we will continue to introduce new models that are totally new, with no predecessor. As we move into 2018, we will keep our focused strategy and aim to rethink the future of mobility.
Mohammed Khader, president of Al Majid Motors - Kia, said: "Though Kia is getting noticed as one of the fastest-growing automotive brands and has been awarded for its design and quality in various parts of the world, the gap between the actual quality and the perceived quality need to be addressed, particularly in this part of the world."
- sandhya@khaleejtimes.com