Al Masaood Automobiles (AMA), which represents the Nissan, Infiniti and Renault brands in Abu Dhabi and Al Ain, said yesterday it will be investing Dh500 million over the next three years, primarily in the Western Region of Abu Dhabi, as it seeks to more than double its fleet car business to partly cater to the growth of car-hailing companies.
The dealer will be building a 600,000-square metre warehousing and logistics facility representing its Infinti and Nissan brands in the town of Silaa 350 kilometres from the capital, said Sayed Humayun Alam, the general manager of sales for AMA. It is also developing a new 200,000-sq metre logistics and warehousing facility in the Kizad industrial zone.
The third strand of its expansion into the country’s car market is an attempt to more than double its fleet car business targeting corporates, government institutions and the increasingly prevalent limousine taxis of Uber and Careem. Historically, fleet cars account for only 10 per cent of the dealer’s business, but the target is to push the needle to 25 per cent of its car sales over the next three years. The UAE’s fleet business, including car hire, taxis and corporate business, is predominantly outside the capital, with 70 per cent of the business north of Abu Dhabi.
While the economic climate continues to challenge the country’s retailers, the softening environment has offered an opportunity to invest in the business.
New car sales in the UAE are projected to grow at an annualised rate of 4.5 per cent to more than 267,000 in 2020, according to a report by Dubai-based investment bank Alpen Capital released last month.
The car market across the UAE is down 23 per cent as a whole, with Al Masaood recording about a 10 per cent decline in sales across all its marques. “We believe in the business and the business cycle,” Mr Alam said. “The land in Silaa, nor the opportunity, will be there in the future so we had to take the initiative now. While the car market is down generally it has grown, on average, between 10 and 15 per cent over the past few years. There are bright spots such as the large Infiniti SUVs, which have seen a 10 per cent rise in sales this year.”
The current economic climate is not all bad news for car dealerships. UAE car dealers that buy from Japan have seen inventory prices fall by 10 to 12 per cent as the US dollar, to which the dirham is pegged, has appreciated against the currency. Therefore, cars being imported into the country are cheaper this year than they were last year.
“We are reasonably optimistic for this year and next year,” said Kevin Hughes, the brand manager for AMA. “We are well positioned economically and we aren’t expecting a dramatic drop in sales at all. Infiniti Mena is also looking at pre-owned car sales, which could be another avenue of growth that is in a pilot stage right now, so we are very positive about the coming year.”
ascott@thenational.ae
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