Al-Futtaim Motors, one of the biggest car dealerships in the UAE, increased its Toyota sales by 27 per cent in the first six months of the year, joining industry peers in reporting eye-watering figures.
The Japanese brand's stellar performance parks it nicely alongside Ford and General Motors (GM), which also both enjoyed double-digit growth in sales.
Brands' premium cars were the first to show heady sales growth in the first half of the year, as the automotive sectorflourishes in the UAE.
"The first indication that things are going well is that premium car sales increase," said Bill Carter, an analyst at Autodata Middle East. "The fact is the whole market is up. I think we will end up with a really good year."
Analysts estimate that Toyota, which is the market leader, sold about 80,000 cars last year in the Emirates, despite experiencing supply problems from Japan in the wake of the earthquake and tsunami in March last year.
A 27 per cent increase in sales for the whole year would mean the brand would have sold more than 100,000 cars.
"We had several car launches in the past six months, including the market-leading 4x4 Land Cruiser," said Andy Squires, the general manager for Toyota sales, operations and marketing at Al-Futtaim Motors. "We have also recently launched Toyota 86, the best sports car from Toyota in decades."
He added customers were more closely monitoring fuel consumption and environmental issues had increased in importance.
Al-Futtaim Motors Toyota is the latest brand to release eye-watering sales numbers, indicating a buoyant market and growing consumer confidence, particularly among Emiratis.
The reporting season kicked off with BMW and Audi indicating they had their best first-half sales performances ever across the Middle East.
Emirates Motor Company, part of Al Fahim Group, also reported their best sales ever in Abu Dhabi and Al Ain. Jaguar Land Rover increased its sales 36 per cent in the Middle East in the year up to March, compared with the previous fiscal year.
"The popularity of Jaguar Land Rover in this region is reflected in our strong sales performance," said Justin Weaving, the regional sales director for Jaguar Land Rover Middle East and North Africa.
"Notable market performers include the UAE, which continues to be our best-selling market in this region for Land Rover."
Ford and Lincoln retail sales were up 38 per cent during the first half of the year in the UAE, compared to last year, Ford Middle East said last week.
GM, which sells Chevrolet, Cadillac and GMC cars, also said sales in the Emirates increased 11 per cent in the same period.
"Most of the people we are talking to are saying things are good and that they are more than happy with the way that the market is going," said Mr Carter.
Many car dealerships were offering cheap financing options at the start of the year to drum up business as banks became more willing to lend to buyers.
Al-Futtaim Motors was offering customers initial loans at 1.99 per cent interest for many of its Toyota models in the first quarter.
The company's Honda unit, which was one of the brands hardest hit by the Japanese earthquake last year, also said supplies were back on track and sales were up.
"Honda sales are up year on year despite the acute shortage of stocks following the catastrophic events in 2011 in namely Japan and Thailand," said Mark Kass, the regional managing director for Honda at Al-Futtaim Motors. "However, I am pleased to report that stocks have normalised whereby we envisage a buoyant second half to 2012."
rjones@thenational.ae
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Director: Christian Carion
Starring: James McAvoy, Claire Foy, Tom Cullen, Gary Lewis
Rating: 2/5
UAE currency: the story behind the money in your pockets
THE DETAILS
Kaala
Dir: Pa. Ranjith
Starring: Rajinikanth, Huma Qureshi, Easwari Rao, Nana Patekar
Rating: 1.5/5
Key facilities
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Key products and UAE prices
iPhone XS
With a 5.8-inch screen, it will be an advance version of the iPhone X. It will be dual sim and comes with better battery life, a faster processor and better camera. A new gold colour will be available.
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iPhone XR
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Apple Watch Series 4
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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.”
RESULTS
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Expert input
If you had all the money in the world, what’s the one sneaker you would buy or create?
“There are a few shoes that have ‘grail’ status for me. But the one I have always wanted is the Nike x Patta x Parra Air Max 1 - Cherrywood. To get a pair in my size brand new is would cost me between Dh8,000 and Dh 10,000.” Jack Brett
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“There’s nothing out there yet that I’d pay an insane amount for, but I’d love to create my own shoe with Tinker Hatfield and Jordan.” Joshua Cox
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“If I had all the money in the world, I’d live somewhere where I’d never have to wear shoes again.” Raj Malhotra
