Al Habtoor Motors takes a ride into Saudi Arabia

Dubai: Dubai-based Al Habtoor Motors is taking a ride into Saudi Arabia by picking up the dealership rights for the Mitsubishi Fuso commercial vehicle range. The first of the showrooms will open this month, in Riyadh, and followed by Dammam and Jeddah.

Mitsubishi Fuso Truck and Bus Corp is majority-owned by the German automotive giant Daimler AG, while Japan’s Mitsubishi Corp. holds the rest.

“There were six bidders in the running for the Saudi rights, with five of them being from the kingdom,” said Karl Hamer, managing director at AHM.

“Two were shortlisted and eventually we were chosen. The presence in Saudi Arabia represents a major investment in the future for us — at some point we want the operations there to be as big as what we have built in the UAE.”

Hamer declined to say whether that meant AHM would consider adding passenger car and SUV brands to an expanded Saudi network. In the first year of operations, the target is to sell around 6,000 units.

“The Saudi venture is 100 per cent owned by us — Fuso will help secure a significant presence in that market and which we will build upon — with or without other brands,” said Hamer.

An exposure in other markets is rated as vital by some of the biggest names in the UAE’s retail automotive space. Some have already made the cut, such as the Al-Futtaim Group and Arabian Automobiles Co.

“It’s a fact that car sales growth in the UAE is slowing down — last year’s would have been around 3 per cent for an overall volume of 400,000 units plus,” said Hamer. “But AHM managed to put in 67 per cent during the same period for a tally of around 70,000 units.

“And we are planning on a 10 per cent growth this year and much higher than the rest of the market’s. Even if the overall market shrinks, we are going to grow and grabbing marketshare.”

Apart from Mitsubishi cars and pick-ups, AHM represents the likes of Bentley, McLaren and Bugatti as well as China’s Chery.

“With Mitsubishi, the yen levels [to the dollar] are still in a favourable position despite some firming up from last year,” said Hamer. “It was in February last year that the yen had slipped appreciably in value... and we immediately passed it into our sticker prices. The rest of the dealerships handling Japanese brands did so much later.

“Our margins have remained healthy despite this. The yen’s still in favourable territory, at 119 or so, and that’s a key factor in us aiming for nothing less than 10 per cent growth this year despite the many challenges.”

Fact box: The Pajero doesn’t need gizmos to sell

Karl Hamer’s got a simple formula for the Pajero, the Mitsubishi SUV that has been a perennial best-seller in these markets.

“It doesn’t need a remote access to unlock and start the ignition to sell; nor does it require a dashboard with all the trimmings that you see in the fancier models,” said the managing director of Al Habtoor Motors. “A regular key works just fine with Pajero buyers. They turn the key and immediately get into a highly reliable environment. With a certain buyers — and there are lots out there — it’s what counts more than on-board gizmos.”

There’s no arguing with Hamer’s logic given the numbers Pajero has been putting up. The dealership’s been knocking up volumes of 1,000 units a month — and at a time when the automotive retail market is under a great deal of stress brought on by lower consumer spending and concerns over the economy.

The Pajero is available in two engine sizes, the 3.5- and 3.8-litre, and at prices between Dh89,000 to Dh129,000.

“Mitsubishi didn’t create too many variants for the Pajero and that’s helped keep showroom prices to a well-defined range,” said Hamer. “I can’t say the same about some of the competing makes, where one particular SUV sells for anything between Dh130,000 to Dh200,000 plus. All it does is confuse a buyer.”