I Local distributor sees strong growth in commercial vehicle sales

Swaidan Trading Company, the distributor of automobile brands such as Peugeot, Ashok Leyland and Great Wall Motors, expects passenger vehicle sales in Dubai to pick up in the second half after lagging in the first two quarters.

"Passenger vehicle sales are driven by people's sentiments. For instance, if the economy is not performing well or there are insecurities about job losses, this slows down the decision-making process. In the last few month, certain sectors of the economy have not performed well. This has slowed down demand. However, the worst is over. The government and private players are taking up new economic initiatives. All this will push demand for products and services related to the automobile industry," Ajit Kumar, CEO at Swaidan Trading Co, told Khaleej Times during an interview.

The company witnessed year-on-year growth in its commercial vehicle sales. Attributing it to economic activity in Dubai driven by the Expo 2020 and associated activities, Kumar said: "There are certain businesses where we are 30 per cent ahead of last year's numbers - primarily driven by commercial vehicles. For instance, we have had huge growth in our bus business. That is directly related to the school and construction segments. It's only individual car sentiment that has been affected."

While commercial vehicles sales are reflective of the resurgence in economic activity, most dealerships and distributors have seen the market for passenger vehicle sales shrink by 15 to 20 per cent in the first half of 2016. This resulted in a build-up of unsold cars in the beginning of the year.

As a result, a lot of manufacturers and local dealers offered special schemes to customers during Ramadan.

"This is the best time to buy a car if you are looking for a deal. Every major brand is offering you special payment options, high-end features, long-term warranty, maintenance support, etc. All this makes car buying a very attractive proposition," informed Kumar.

Inventory clears up

With most of the inventory cleared up at dealerships, it's time to pin hopes on new models for 2017. "We are very bullish about long-term market opportunities. The market has already come to its lowest point. Post Ramadan, with the summer holidays getting over and new models being launched in 2017, there is going to be a big uptake for passenger cars from August and thereafter. We will launch new models by August and by November, all dealers will have new models in their line-up," the CEO explained.

Swaidan Trading distributes passenger vehicles from Peugeot and Haval from Great Wall Motors, China's biggest private auto manufacturer. It launched the Haval SUV line-up in the UAE in April.

"We have three objectives for Haval: the launch, increase brand awareness and get the numbers. We are targeting between 500 and 700 units in the first year. We are well poised to attain these numbers," said Kumar.

The dealership claimed to be getting interest from high-quality customers - people who are willing to transition from European luxury vehicles to Chinese-made Haval.

"Every day, you are buying Chinese made products - from your iPhone to your computer, it is all coming out of China. The general standard and quality of manufacturing abilities have gone up substantially in China. There were doubts about the reliability of Chinese automobiles in the past. At one point, the Chinese entered the market with very little preparation," the CEO said.

China in focus

However, all major auto distributors in the UAE have a Chinese brand under their belt today. They are all vying to win the rights for Chinese automotive brands. That signifies market confidence and the shift in consumer preferences.

The mid-range SUV Haval H6 is the best-selling product in the brand's line-up globally and the UAE has seen similar consumer demand too.

It costs approximately Dh65,000 to Dh70,000, depending on the features you choose.

"For dealerships like ours, the challenge is to put more units in operation so that your market share is retained and you also have customer relationship through the owning process. We are heading into a possibly good half and a very interesting 2017," Kumar concluded.