Strong Q4-17 sales give cushion for carmakers in Gulf markets

January 31, 2018
It is way too early to talk about any VAT-specific impact on sales so far, says Ford regional chief

There was lots happening on the sales side in the Gulf’s automotive retail sector in The fourth quarter of 2017 and which is now offering some cushion to a more sober start in the initial weeks of 2018. Plus, there is the support coming in from those Gulf markets that haven’t yet implemented VAT.

“We are only into the third week of January and honestly I think it’s too early to say what impact VAT has had in the UAE and Saudi Arabia,” said Thierry Sabbagh, Managing Director at Ford M.E. “In 2017, one of the biggest strengths we had was the improvement in the retail (vehicles sold to individuals) business, and that was up 4 per cent. We could maintain those numbers.

“Plus markets like Kuwait are still going strong for us, where we are benefiting from changing the distributor (18 months ago).”

In the run up to January 1, it was widely expected that car sales in the UAE would come to an immediate halt as soon as the VAT factor showed up. But, by and large, January to date has provided enough buying support; buyers are still making the trek to showrooms and deals are happening. The important thing for the auto industry, including manufacturers, was to make sure some sort of connect is still there with buyers during the adjustment period.

Interestingly, Ford’s UAE dealership’s January campaign was built around raffles, including winning back up to Dh150,000 on select model purchases, rather than address the VAT cost component specifically. Sabbagh said it was done on purpose. “We wanted this campaign not to be part of the clutter (of VAT-specific promotions),” he added. “Even in Saudi Arabia, the dealership addressed the cost of fuel by extending free vouchers for a certain period than talk about VAT specifically.”

For Ford, it will soon have a new model showing up at dealerships and which has the heft to convince wanna-be buyers to get started on the process. The all-new Expedition, sporting an extensive inside-out makeover, will become available this quarter itself. (Local price of the top-of-the-range SUV, which was first revealed in November, is yet to be fixed.) “We have got a strong equity in the nameplate … and it’s a fact that our utility vehicles have had the greatest following in these markets,” said Sabbagh. “What was interesting was we had the Ranger Wildtrak (pickups) attracted a lot of retail business last year.

“But we do have continuing demand for the sedans, a good deal of it on the fleet side.”

Ford’s been adding another quiver to its bow, namely in the form its Transit range. Hugely popular in Europe, these commercial vehicles recorded a solid run all through 2017, picking up deals with the Dubai and Saudi Arabia ambulance fleets as well as souq.com.

“We have introduced the full line-up of Transits in these markets now, got in place dedicated teams at the regional office to oversee, and also at the dealers,” the regional head added. “I guess that’s paying off. We have had Dubai Ambulance Services calling it their vehicle of the future. These things help.”

gulfnews