We live in a country of consumption on an epic scale and that’s never more apparent than when we look at the cars on our roads. While car buyers the world over get more concerned with fuel economy and low emissions, whether that’s because of an environmental conscience or simply a tightening of the purse strings, by and large these are things that do not concern the majority of us in the UAE.
So why, then, is Volkswagen in Dubai showcasing the world’s most economical production car? How could it possibly strike a chord in a marketplace where the last thing on our collective minds is saving money and natural resources? Easy: the XL1 is a limited-edition, mid-engined, carbon-fibre-constructed marvel that looks like it’s either come from some 1950s comic book or the distant future, depending on how old you are.
Yes, this is a car that you can actually buy (albeit it for an expected price of about Dh550,000). But you’ll need to be quick with your deposits because, once production is over at the end of this year, it will make a Bugatti Veyron seem positively common. Just 200 will be made and, as an example of Volkswagen’s technical and engineering might, it’s every bit the Veyron’s equal.
Keeping the car company in Dubai and guiding interested parties around its startling form is Andreas Keller, who flew in from Germany just hours before we meet. Keller was one of the engineers who worked on developing the XL1 and he shows me a short video presentation that explains some of its technical highlights, such as the carbon composite tub, its low rolling resistance and incredibly narrow tyres, its completely flat undertray, its low weight and beyond-slippery teardrop shape. It’s a distillation of its maker’s knowledge on how to make the most economical car that there is. How long, I ask him, has this project taken from conception to production?
“Sixteen years,” comes his answer and I’m flabbergasted. “It’s been through fits and starts and the physical look of the car was basically settled back in 2002, but it has been refined since then. For instance, when we spoke with potential XL1 customers, it became obvious they wanted a conventional seating arrangement [the first two design concepts featured two tandem seats], so that meant widening the structure, but we had to do so without increasing weight or reducing aerodynamic efficiency.”
The XL1 in final, production form is shorter than a VW Polo yet lower than a Porsche Boxster and it boasts a coefficient drag of 0.189 – almost half the figure of what’s generally considered acceptable. Its physical form is wider at the front than the rear and nothing is present that isn’t absolutely necessary. There are no holes in its front end, it has flat wheels and the narrower track rears are enclosed by spats. The rear mirrors are tiny cameras rather than the conventional type that we’ve seen for decades and they feed high-resolution screens in each door card.
It also weighs 795kg and that’s why the interior is a masterclass in minimalism. The emphasis here is on clean, understated design and function. It has, says Keller, air conditioning, but it’s not really powerful enough for 50°C UAE-summer heat. “It’s fine between -10°C and 40°C, though.” The seats are manually adjustable, covered in cloth and Alcantara (it weighs less than hide) and the backs are fashioned from carbon composite. And, as if the exterior wasn’t startling enough, the doors are scissor items, hinging on the A-pillars “to make getting in and out easier because of the car’s low ride height”.
The drivetrain is a plug-in hybrid system, with a battery pack and an 800cc, two-cylinder, turbo diesel engine. It takes two hours to charge the battery from flat and it will cover up to 50km on electrical power alone. Working in conjunction with the engine, the range from 10 litres of fuel is about 500km. Yep, you read that right – the XL1 consumes at a rate of 0.9 litres per 100km and emits 21g of CO2 per kilometre. All very worthy, you’ll no doubt agree, but in Dubai there’s one reason alone it will find buyers: it looks like nothing else out there.
khackett@thenational.ae
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Formula Middle East Calendar (Formula Regional and Formula 4)
Round 1: January 17-19, Yas Marina Circuit – Abu Dhabi
Round 2: January 22-23, Yas Marina Circuit – Abu Dhabi
Round 3: February 7-9, Dubai Autodrome – Dubai
Round 4: February 14-16, Yas Marina Circuit – Abu Dhabi
Round 5: February 25-27, Jeddah Corniche Circuit – Saudi Arabia
Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.
Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.
“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.
Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.
“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.
Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.
From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.
Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.
BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.
Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.
Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.
“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.
Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.
“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.
“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”
The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”
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A State of Passion
Directors: Carol Mansour and Muna Khalidi
Stars: Dr Ghassan Abu-Sittah
Rating: 4/5
Washmen Profile
Date Started: May 2015
Founders: Rami Shaar and Jad Halaoui
Based: Dubai, UAE
Sector: Laundry
Employees: 170
Funding: about $8m
Funders: Addventure, B&Y Partners, Clara Ventures, Cedar Mundi Partners, Henkel Ventures
Indoor cricket in a nutshell
Indoor Cricket World Cup – Sep 16-20, Insportz, Dubai
16 Indoor cricket matches are 16 overs per side
8 There are eight players per team
9 There have been nine Indoor Cricket World Cups for men. Australia have won every one.
5 Five runs are deducted from the score when a wickets falls
4 Batsmen bat in pairs, facing four overs per partnership
Scoring In indoor cricket, runs are scored by way of both physical and bonus runs. Physical runs are scored by both batsmen completing a run from one crease to the other. Bonus runs are scored when the ball hits a net in different zones, but only when at least one physical run is score.
Zones
A Front net, behind the striker and wicketkeeper: 0 runs
B Side nets, between the striker and halfway down the pitch: 1 run
C Side nets between halfway and the bowlers end: 2 runs
D Back net: 4 runs on the bounce, 6 runs on the full
THE LIGHT
Director: Tom Tykwer
Starring: Tala Al Deen, Nicolette Krebitz, Lars Eidinger
Rating: 3/5
Analysis
Members of Syria's Alawite minority community face threat in their heartland after one of the deadliest days in country’s recent history. Read more
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Wicked
Director: Jon M Chu
Stars: Cynthia Erivo, Ariana Grande, Jonathan Bailey
COMPANY PROFILE
Name: Kumulus Water
Started: 2021
Founders: Iheb Triki and Mohamed Ali Abid
Based: Tunisia
Sector: Water technology
Number of staff: 22
Investment raised: $4 million
UAE finals day
Friday, April 13
Rugby Park, Dubai Sports City
3pm, UAE Conference: Dubai Tigers v Sharjah Wanderers
6.30pm, UAE Premiership: Dubai Exiles v Abu Dhabi Harlequins
The burning issue
The internal combustion engine is facing a watershed moment – major manufacturer Volvo is to stop producing petroleum-powered vehicles by 2021 and countries in Europe, including the UK, have vowed to ban their sale before 2040. The National takes a look at the story of one of the most successful technologies of the last 100 years and how it has impacted life in the UAE.
Read part four: an affection for classic cars lives on
Read part three: the age of the electric vehicle begins
Read part one: how cars came to the UAE