Car factories have changed a fair bit over the last couple of decades. Images of oil-stained workers in brown overalls working in dark, dusty factories are happily now a thing of the past. Your modern car factory is clean, tidy and, in many cases, hospital-like. And it needs to be: modern engines and electrical components simply don't like being built in anything but clinical conditions.
The one thing that hasn't changed is the role car factories play in the local economy. Simply by size, any manufacturer's facility is bound to end up employing a fair percentage of locally based workers. When a factory closes, the repercussions can be catastrophic, as much of the north of the UK found out when its motor industry fell apart in the late 1980s. Many towns still bear the terrible scars of losing the sole source of employment for most of its inhabitants.
But where some companies have closed plants, others have opened new ones. In Dresden, Volkswagen has constructed something a little more elaborate than a humble car factory. Part museum, part event space and, of course, part car plant, Die Gläserne Manufaktur (the glass factory in English) is completely see-through, providing local residents with a view unlike any other car facility in the world.
But why Dresden, and why put everything on display to the world? When the Berlin Wall was demolished in 1989 and Germany became reunited, the country's motor industry moved quickly to bring into the fold the thousands of people now seeking work in the new capitalist economy. Dresden was well used to hardship after being almost completely wiped off the map during the Allied bombing of the Second World War. Volkswagen looked at this resilient city as the ideal place to build a new car plant for its flagship Phaeton.
Inside the plant, Phaetons are built on an ever-moving floor made of Canadian maple. The conveyor snakes around the airy facility, transporting the cars to each fitting station. It is like being inside a glass aircraft carrier, albeit with luxury cars rather than fighter jets. The wooden shop floor has the same feel as the teak deck of a mega yacht, giving the whole facility a strange, un-factory-like feel.
In the centre of the building, a huge floor-to-roof atrium is the centrepiece of the design. This area houses the vast entrance and also a collection of classic cars for visitors to ogle. The building was built with excellent acoustics in line with the company's vision of it being a gathering point for the people of Dresden.
The space is so well designed, it has hosted concerts, operas and major events, all fitting very nicely with the image the Phaeton is trying to project. "The facility is the only factory in the downtown area of Dresden and the people of the city are very proud of the building," says Dr Frank Löeschmann, the general manager and head of production for the plant. "It's not just an employer but, due to the events we hold, it's also a cultural hub.
"A few years ago, the city suffered some really bad flooding and the symphony orchestra's home was put out of action. We offered them the chance to play in the factory and they jumped at the chance. The event was amazing and packed with music lovers. It's quite different to see a full orchestra in a car factory."
It's hard to imagine an opera singer belting out an aria with half built cars in the background, but somehow Die Gläserne Manufaktur pulls it off. The whole place reeks of culture and thoughtful design. The area around the factory has obviously got more in common with manufacturing than it originally lets on.
"The area around Dresden has more than 100 years of car-building history," says Löeschmann. "It's also well known for watchmaking, which from a precision point of view is very similar to luxury car building."
The famous Glashutte watch company is in the nearby area and the whole region resonates with engineering know-how. And for Volkswagen, when everyone walking past can see what you're up to, you need to make sure everything is inch-perfect.
"The interesting thing about the factory is that everything we do is on show to everyone and from almost any angle," says Löeschmann. "It's a real glass house, so we have to produce cars and operate in a slightly different way to normal. The whole factory helps to sell not just the car, but the philosophy behind it."
In the ground-floor reception area, Phaeton buyers can personally collect their car, a trait VW has picked up from a number of other high-end car manufacturers. But that's only if you can wade through the throng of smiling greeters who take your coat, offer you a coffee and anything else a car buyer might need for a day at the factory.
"Many new Phaeton customers opt to collect their car directly from us at the factory, often travelling to Germany from across the world," continues Löeschmann. "They come up to Dresden and spend two or three days here. They can see the city and take in the opera before touring the factory and seeing their car being finished. We have around 1,000 customers a year choosing to pick up their cars from the factory. It's a nice touch when buying a luxury car."
And why not? When you're spending a small fortune on a luxury saloon, you probably want a bit of pampering. The centre of the city is well worth a visit and the factory certainly has the wow factor. With VW lacking a facility with a history of iconic car manufacturing, the company went completely in the other direction, creating a centrepiece for what the car giant can achieve, as well as adding something back to the community.
You would be hard-pressed to find a building more iconic that is both attractive, entirely functional and extremely friendly than Die Gläserne Manufaktur. It's almost possible to forget that cars are manufactured there. If you are in the city of Dresden or you fancy picking up a Phaeton to park on your driveway, then pop into this stylish, see-through factory and experience a whole new approach to car building.
motoring@thenational.ae
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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.”
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