Luxury seeks buyers at Paris Car Show

High-end carmakers are on a drive to boost Middle East interest and reverse global sales hit in the wake of the economic downturn.

A Ferrari SpA California automobile sits on display on the first press day of the Paris Motor Show in Paris.

PARIS // Luxury car makers are on a drive to boost Middle East sales, with brands such as Lotus and Ferrari shifting their regional expansion plans into high gear.

The British sports car brand Lotus is expecting to open its first dealership in the Emirates within two years as global car makers seek to tap emerging markets to counter a global slowdown in sales.

Dany Bahar, the chief executive of Lotus, said the company planned to have a UAE dealership by October 2012. "It's actually a market which gives us the prestige," he said ahead of the Paris Motor Show, which runs from tomorrow to October 17. "If you are able to succeed in the UAE, that means that you are recognised as a gold-star brand. And I think the UAE can do up to 5 per cent of our annual volumes."

Lotus, which had a string of Formula One wins in the 1960s and 1970s, will introduce its newest line-up of five cars at the Paris Motor Show. The company hopes its latest offering will restore its former glory. This hope rests on the new cars, which are to be introduced over the next five years. They include a revamped version of past models such as the Elite and the new four-door Eterne. Many of the world's car makers are looking to rev up their business after sluggish sales last year amid the global economic downturn.

The Emirates was not immune. Early last year, skittish banks began to clamp down on automotive financing, tightening criteria such as minimum salary requirements for potential car buyers. Meanwhile, many UAE consumers put off non-essential purchases such as cars. While there are no official figures for the UAE car market, the research company Business Monitor International estimates UAE car sales shrank by about 8.5 per cent last year to 324,900 vehicles, some of which were destined for re-export.

But early indications point to a recovery. Al Futtaim, which sells Toyota and Lexus cars in the UAE, says sales rose by about 35 per cent in the first half. Business Monitor is forecasting sales growth of about 8 per cent this year, to an estimated 352,913 vehicles, some destined for re-export, with sales valued at a total of Dh42.45 billion (US$11.57bn). Amedeo Felisa, the chief executive of Ferrari, says the Middle East is one of three markets where his company expects sales growth. He also expects sales gains in eastern Europe and the Far East.

Last year, Ferrari's sales in the region rose by 30 per cent, and the company hopes to match that performance this year. "The larger [market] is the Emirates, but I think we have to take care of the other countries which are today small but in the future will be huge," he said on the sidelines of the motor show. "I don't think we have reached the top of the possibility of the potential of the market there."

The opening of the Ferrari World theme park in Abu Dhabi this month will raise the brand's visibility, Mr Felisa said. Lotus is overhauling its dealer network across the Middle East and Africa, Mr Bahar said. It already has a presence in the GCC, including in Saudi Arabia and Qatar. The region continues to be a good market for Rolls-Royce, which doubled its regional sales in the first six months of this year.

Jolyon Nash, the luxury brand's director of sales and marketing, said there were signs of recovery in what had generally been a difficult car market. "The industry as a whole is still more optimistic than it would have been a year ago, or two years ago," he said in Paris. "We have plans for significant growth this year … and the Middle Eastern dealerships are contributing significantly to that."