Luxury car makers off to fastest start ever

Luxury carmakers reported their best ever sales performance in the first half of the year as dealerships around the Middle East invest billions of dirhams in new showrooms and facilities.

Audi is hot on the heels of its more popular German rivals, BMW and Mercedes-Benz. Delores Johnson / The National

Luxury car makers enjoyed their best sales performance yet in the first half of the year as dealerships around the Middle East continue to invest billions of dirhams in new showrooms and facilities.

Audi dealerships in the region are in the process of spending nearly Dh1 billion (US$272.2 million) on the brand after BMW partners also spent hundreds of millions of dirhams in the past year.

"I think the luxury manufacturers are starting to realise that they do need to invest in dealership facilities to grow their markets," said Bill Carter, a research analyst at Autodata Middle East, an independent vehicle valuations service.

"The dealerships are investing heavily in the brands and usually sales increase as a result. This is the way things are going for luxury cars at the moment."

Audi is hot on the heels of its more popular German rivals, BMW and Mercedes-Benz, selling 15 per cent more of its cars in the first half of the year compared with the same period last year.

Audi delivered a total 4,274 vehicles to customers in the region in the first six months of this year and June was the best month since Audi launched a wholly owned subsidiary in the Middle East in 2005.

The brand began selling the new Audi A4 PI, A5 PI and Audi Q3 in the first half of the year.

"It's a growing brand and the investors see the growth," said Jeff Mannering, the managing director for Audi Middle East. "It's a great result the first half. It's a lot to do with the products we have launched … but it's also the commitment by the dealers."

He said dealers in Abu Dhabi, Dubai, Saudi Arabia, Lebanon and Oman were spending about Dh1bn on new showrooms and facilities.

Al Nabooda, the exclusive dealer of Audi cars in Dubai and the Northern Emirates, last week said it was investing Dh1bn on its Porsche, Volkswagen and Audi brands, with the latter making up the largest investment.

In September, the dealer will open a three-storey, 3,656-square metre Audi showroom - the car maker's largest in the world - on Sheikh Zayed Road in Dubai.

Al Habtoor Motors said it would have a record year for Bentley cars in the UAE thanks to the launch of the V8 model this month, which has already presold 45 cars at Dh750,000 each.

Karl Hamer, the managing director at Al Habtoor Motors, expected sales to grow 80 per cent this year to more than 300 on the back of pre-orders.

"For Bentley, we are now the second in the world behind China in sales," he said. "We are up 15 per cent in the first half, however, we predict it will be much more than that by the end of the year."

Emirates Motor Company (EMC), part of the Al Fahim Group and the distributor of Mercedes-Benz in the capital, also joined their peers in reporting stellar results.

"We are are up by just under 15 per cent," said Chris Preston, the managing director for EMC. "It's been our best six months ever. The business sentiment has definitely improved and there is more confidence in the market."

Meanwhile, BMW delivered 10,352 BMW and Mini cars in the first half of the year, which was a 13 per cent increase on the same period last year and a record for the brand.

Abu Dhabi Motors, the exclusive dealer for BMW, Rolls-Royce and Mini in the UAE capital, opened the world's largest BMW showroom in February.

"The number of cars sold in the first six months is the best-ever half year results we have achieved here in the Middle East, which sets the pace for another successful year," said Alexander Eftimov, the director of sales and marketing at BMW Group Middle East.

The BMW 5 Series was the brand's most popular model, followed by the X5 and the 7 Series.

The UAE remained the highest volume selling market in the Middle East, accounting for 51 per cent of BMW and Mini regional sales in the first half of this year.

The strongest market for Audi was also the UAE with a total of 1,738 vehicles delivered to customers in the first half of 2012, with positive growth of 14 per cent.

"We are outgrowing the market," said Mr Mannering. "But we have to do it, because we are in the position where we are not the market leader.

He believes the overall market in the Middle East is growing at a rate this year of 4 per cent and the premium car market at 6 per cent.

twitter: Follow and share our breaking business news. Follow us

iPad users can follow our twitterfeed via Flipboard - just search for Ind_Insights on the app.