Dubai: UAE dealerships – and their counterparts elsewhere – have a lot on their hands to deal with. And not to ensure enough shipments of the next model-year cars available. Here’s a check-list:
- The younger generation thinking it’s less cool to own cars.
- Sharp drops in the number of people turning up at showrooms.
- Stiff competition – and getting even tougher – from local second-hand dealers.
- The rising interest among users to ‘subscribe’ to car usage.
So, dealerships do have a lot to deal with when it comes to making sense of what’s likely to happen today – and further down the road. Michel Ayat, CEO of AWR Automotive and head of the Dubai Auto Dealers Group, has been doing just that.
Consumer behaviour is changing in their attitude towards cars. The market dynamic is constantly in motion. Are UAE auto dealers in sync with what’s happening?
There’s no doubt that UAE’s automotive distributors have to transform in terms of communication with the customer, in terms of investment in technology, and in terms of processes. Now, there are many new ways to communicate with the customer to generate leads and transform those leads.
Because we have to, as the number of customers entering showrooms drop by 50 per cent. And there’s no accounting for what the attitude of Gen Z will be when it comes to how they want to use cars.
If dealerships want to be in the market and still have the best financials, you have to do the transformation. Now.
In the past, Nokia, Kodak waited too long and have lost their market because they were not able to transform. The CEO’s job these days is to build strategies and transform.
That’s a dire message…
If competitors do not work on the transformation of their companies to fit the new market, they will lose their shares and disappear. This has happened with the greatest companies in the world.
Does all this mean reducing the number of showrooms you have?
No, it doesn’t. We will maintain the right levels of representation, both with showrooms and after-sales in Dubai, Sharjah, and the northern emirates.
From now on, every dealer has to think – do we need to have those massive facilities for showrooms?
The showrooms will get smaller and will only have the main selling models in the showroom.
Now, we know of the 50 per cent drop in customers coming to the showrooms. And the other 50 per cent don’t need the details a salesman used to provide in the past. There are many more changes that we can see happening from 2022 onwards. But I say that the traditional period ended for dealerships in 2015 and not in 2020 because of the pandemic.
That’s all for the future – are UAE dealers closer to resolving the new car availability issue?
By the first quarter of 2023, that should be fully resolved. Semiconductor shortages have hurt shipments for two years, but the global auto industry finally will see an end to this.
As for us, we are expecting a 28 per cent increase in shipments in Q4-22, and that should ease most of the demand constraints. But there are still models that we can sell the same day – the Nissan Patrol for instance. It remains the most in-demand SUV in the UAE and we have had monthly sales of 500 off units.
It’s because the most popular Patrols sold here feature the V8, and that’s not in sufficiently high demand elsewhere in the world. That’s enough for us to have adequate shipments coming every time, more than any of the other models. That’s been a big help.
Are you finally ready for the launch of a Nissan EV?
We are, and should have the all-new Nissan Ariya electric crossover sometime in 2023. The UAE auto market is getting ready for EVs that are more than from niche brands. We will have all options available – internal combustion, electric, hybrid and anything else that shows up.
It’s for the UAE consumers to decide what they want to do with it – buy or rent.