Emirates Motor Company to spin off passenger cars unit

'In the past few years, Mercedes-Benz’s passenger car line has almost doubled, compelling us to look at a new strategy,' said Frank Bernthaler, the automotive chief executive of Al Fahim Group.

Emirates Motor Company sold 5,010 passenger cars last year, a 25 per cent increase from 2013. Pawan Singh / The National

The distributor of Mercedes-Benz vehicles in Abu Dhabi will separate its fast-selling passenger cars unit from its more cyclical commercial vehicles business.

Emirates Motor Company (EMC), part of Al Fahim group, said it would allow a more dedicated and focused approach, freeing the vans and lorries arm of the operation to be more flexible. It said it is drawing inspiration from the German manufacturer Daimler, the parent of Mercedes-Benz, which has separate divisions for cars and lorries.

EMC sold 5,010 passenger cars last year, a 25 per cent increase on 2013, according to Frank Bernthaler, the automotive chief executive of Al Fahim Group. It sold about 1,000 commercial vehicles last year across lorries, vans and buses, double the number sold in 2011, he said.

“In the past few years, Mercedes-Benz’s passenger car line has almost doubled, compelling us to look at a new strategy,” he said. “The difference in the two divisions is huge because commercial vehicles, unlike passenger vehicles, rely on business cycles, oil prices, developments given the green light or being cancelled. We will now be able to react to those shifting sands far quicker and offer and even better service to our customers,” he said.

The commercial side is also expanding, distributing Daimler’s Freightliner marque of heavy-duty lorries as well. EMC Mercedes-Benz Passenger Cars will be headed by Kamal Rafih, and EMC Daimler Commercial Vehicles will be run by Bilal Al Ribi, the company said.

Globally, unit sales of Mercedes-Benz passenger cars rose 18 per cent year on year in the first quarter, while Daimler lorry and van sales were up 4 per cent in the period.

According to Daimler’s outlook in April, “in the worldwide market for medium- and heavy -duty lorries, another drop in demand is expected in 2015 following last year’s significant decrease”.

Mr Al Ribi said that Abu Dhabi remains “a remarkably promising market for commercial vehicles as the emirate’s construction scene keeps growing”.

In a report released last month, Deloitte said it expected Arabian Gulf countries including the UAE to “continue to spend on infrastructure and capital projects to achieve their strategies for diversification of their economies” despite lower oil prices.

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