Dubai: Al Majid Motors and KIA Motors, South Korea's second largest automobile manufacturer, will invest almost Dh150 million in new showrooms to expand in the country and increase customer base, company official said.
"We are opening a sales, service, spare parts and storage centre in Abu Dhabi's Musaffah area," said Shehadeh Ahmad, marketing and business development manager for Al Majid Motors UAE.
With an investment of Dh110 million, the facility will accommodate almost 2,700 vehicles.
Additionally, its showroom in Dubai will be expanded by the end of May with an investment of Dh6 million.
Another major investment will be made in Ras Al Khaimah, where a new Dh29 million sales, service, spare part and storage centre will be set up. The facility will be ready by the last quarter, according to Ahmad.
The investments will be made through distributor Al Majid Motors, a Juma Al Majid Group company.
The South-Korean company suffered a 35 per cent drop in UAE sales last year despite global growth of 12 per cent, according to the official.
It sold about 8,000 cars in the UAE, and suffered a 40 per cent fall in revenues. In 2008 it sold 11,000 vehicles.
"The effect of the recession in the UAE was big," said Ahmad.
During the first two months of 2010, the company has not detected any change compared to the same period of 2009.
"There are still problems with the lending policy of banks.
"They are still afraid of market conditions and are not cooperating in this regard," he said.
"We hope sales will pick up in the second half. With greater lending and more customers in new facilities, we hope to achieve a 15-20 per cent increase by year-end over 2009."
Earlier this year, the manufacturer launched the new 4x4 Sorento, and the new Optima sedan last October.
Cadenza: New model launched
Last Monday, KIA launched the new model of its luxury Cadenza. Available in two versions, the sedan will retail at D115,000 to Dh120,000.
"We are expecting to have an increment in sales after we introduce the Cadenza," Ahmad said. In eight months of sales starting from April, it will make up eight per cent of KIA's year-end sales, he said.
