Fleet vehicle sales drive growth across the Emirates

Fleet sales across the Emirates are expected to surge this year as confidence in the economy continues to rise.

Emirati dealerships are placing substantial vehicle orders as they anticipate a surge in sales on the back of improving economic indicators. Amy Leang / The National

Fleet vehicle sales across the Emirates are expected to surge this year as confidence in the economy rises.

Some dealers, such as Al-Futtaim Honda, are targeting a 50 per cent growth in 2013 fleet sales.

And many have signed large orders, including Al-Futtaim's Toyota division, which recently sold 1,100 2013 vehicles to Dubai Taxi Corporation, and Volkswagen, which has registered an increase in fleet sales of more than 70 per cent so far this year.

Industry experts say the growth is being driven by small and medium companies that are seeking to replace their ageing fleets by taking advantage of economic stability and changes to banking car loan rules to individual buyers.

"Following a period of underinvestment dictated by a crisis-hit economy, fleet owners and operators are now investing in procuring new cars to gradually replace their vehicle assets acquired during 2008-09," Mark Kass, Al-Futtaim Honda's regional managing director, told delegates at the annual Al-Futtaim Honda Fleet Event at the Grand Hyatt Hotel in Dubai.

Economic recovery is now more noticeable across the transport, trade and tourism sectors and oil prices continue to command a premium, he said.

"The real estate and construction segment is growing, thus bringing in an influx of people, which, in turn, fuels the car rental market. Also banks have started lending more freely," added Mr Kass.

He said Al Futtaim Honda had trebled its manpower for fleet sales to keep up with demand.

Fleet sales are also becoming more important to Volkswagen.

The company registered a 76 per cent rise in fleet sales from January to March compared with the same period a year ago.

"This success has been attributed to the addition of the new Passat and Polo Sedan last year, which complete the Volkswagen model range in this region," said Marcus Butros, the sales director of Volkswagen Middle East.

"The area of fleet solutions is of growing importance within our business. Via the Volkswagen sedan strategy, which highlights the need and preference of customers in the Middle East for high standards of safety, design and competitive pricing in the sector. Volkswagen in the Middle East has invested in bringing our full sedan range to this region."

Volkswagen's largest customers include car rental companies but taxis are also major buyers of fleet vehicles.

Dubai Taxi Corporation (DTC) bought 20 Hybrid Camry, 930 Camry and 150 Innova models, increasing the Toyota share of the fleet to 86 per cent. "We released a tender via Tejari.com to buy 1,100 sedans from Al-Futtaim Motors, one of the main suppliers of DTC's fleet, which consists of 3,504 vehicles," said Yousef Al Ali, the chief executive of DTC.

He said Toyota's strength lay in the performance, quality, durability and reliability of its vehicles, which were essential for taxi operations.

"Al-Futtaim Motors is proud to be a long-term partner with a leading institution such as DTC," said Simon Frith, the managing director of Al-Futtaim Motors.

"Together we formed a national phenomenon that has linked the Toyota brand with taxi transportation in the minds of the UAE residents."