Dubai: A downturn need not necessarily be a bad thing for everyone. When consumers get extremely price-conscious, some brands can definitely aim to corner that market. And this is exactly what Union Motors, the dealership for China’s Geely automotive brand has managed to do in recent months.
“It was just over 12 months ago that we started selling the brand in the UAE — by the eighth we started doing 100 plus units a month,” said Raymond Ma, Group General Manager — Automotive at UM. “It’s a level we are getting to be comfortable with and we attained these ahead of our original plans.
“Our volumes were definitely helped by the slowdown the overall UAE car market is going through. What we did was not to overprice the models in any way and this was communicated clearly to prospective buyers.”
What is interesting is that 80 per cent of the volumes are driven by sales to individual buyers and fleet making up the rest. The impression has always been that Chinese car brands will initially make a decisive impression in fleet sales and then progress on to capturing more retail buyers.
“Initially, it was 60:40 in favour of fleet, but then we started the introduction of a completely new line-up, starting with the introduction of the 2.4-litre flagship sedan priced from Dh60,000,” said Ma. “This will be followed by a 3.5-litre version of the sedan and also a SUV (2.4-litre) and also starting from Dh60,000. Geely’s making full use of its ownership of the Volvo in developing the new-generation models.
“In sync with the new launches, we are phasing out the older models, which were primarily our entry-level makes. That switch is what has generated more sales to retail buyers than fleet, because the volume models fancied by fleets are not there.” (Among China’s Top 10 auto manufacturers, Geely made a $1.8 billion [Dh6.6 billion] acquisition of Sweden’s Volvo Cars in 2010.)
Geely’s not the sole Chinese brand hitting a higher gear on the sales side, other makes too have been getting some good responses helped by dealerships with extra-sweet incentives. The dealership — owned by MAN Investments — was one of five contenders in the running to acquire the Geely rights for the UAE two years ago. (It also owns the rights to Changan — another Chinese make.)
But unlike the others who juggle multiple brands within their showrooms, Union Motors only does the two Chinese makes. “But because we don’t have others, there’s every incentive to try and capture each possible sale that is out there,” said Ma. “Our projections are we should turn a profit by or after the fifth year. But if we maintain the growth we have had of late, I think we should be getting there earlier.
“One big advantage is we already have in place a retail network in Abu Dhabi and the Northern Emirates. It means we can focus fully on the process of selling and marketing the brand, as well as look after the after-sales. The rest takes care of itself.”
