Al-Futtaim sales rise despite recall

Overall sales fell last year, but Toyota and Lexus purchases are now picking up.

After overall sales of Toyota and Lexus cars fell 39 per cent last year, purchases rose 39 per cent in the first two months of this year.

Sales at Al-Futtaim Motors, which sells Toyota and Lexus cars in the UAE, rose 39 per cent in the first two months of this year even as the Japanese car maker recalled more than 3,000 cars here after reports of faulty accelerator pedals. This comes after a drop of 39 per cent in overall sales last year, said Simon Frith, the company's managing director.

Still, in an effort to rebuild the confidence of its customers, Al-Futtaim is rolling out the recall quickly and investing more in its after-sales services, he said. "I think if anything happens like this, there must be customers out there that were perhaps considering buying a Toyota and Lexus and have been put off," he said. "Our angle on this is we have got to have the confidence of the customer, and that is why it was so important for us to get this [recall] process right, to get these people in, to reassure them and try to get the communication going."

Last year was a difficult one for car makers, as some consumers postponed big-ticket purchases and banks reduced their financing of such purchases. The UK-based research company Business Monitor International estimates that the UAE car market shrank by about 8.5 per cent last year to 324,900 vehicles. Even as Al-Futtaim's sales fell last year, its market share increased from 30 per cent to 31 per cent, Mr Frith said. Its sales dropped 39 per cent to about 59,000 cars last year. Al-Futtaim said it sold 98,000 cars in 2008.

On February 14, the UAE ordered the car retailer to recall 3,120 vehicles that could be prone to accelerator pedal problems. Toyota had earlier announced it would recall millions of its vehicles worldwide after reports of cars suddenly accelerating without drivers pressing the pedals. Al-Futtaim had initiated on February 1 its own recall campaign in the Emirates for 2005 to 2010 Avalon saloons and the 2009 and 2010 Sequoia sport utility vehicles.

Mr Frith said Al-Futtaim has repaired 2,300 of the recalled cars, meeting the UAE Government's requirement of fixing 70 per cent of all the affected cars by June. The company had contacted everyone in its database and was working with local authorities to locate the rest, he added. There have been no official incidents of faulty accelerator pedals in the UAE, he said. "The fix is quite a simple fix to implement. The risk here was very, very small of having an incident anyway. This thing happens in extreme cold temperatures."

In January and February, Al-Futtaim's sales of Toyota cars rose 35 per cent, while its Lexus sales jumped 70 per cent, Mr Frith said. That performance came in what he estimated was a flat market. The gain in market share was in part due to the launch of five models and better access to car financing, he said. [e-mail]