Dubai: The UAE’s automobile showrooms have already made the switch to looking futuristic. It’s now the turn of the service facilities to make the same trip.
Al Nabooda Automobiles will be commissioning what will be the world’s largest Audi workshop in Dubai (on Shaikh Zayed Road) before year-end. “The plan from the outset was to redefine how cars should get serviced,” said K. Rajaram, CEO at ANA, which also has the rights for VW and Porsche for Dubai and the northern emirates.
“No longer can vehicle owners take satisfaction from being offered a few chairs and tables while they wait for delivery of their car.
“Our plan was to create an ambience that would match their living rooms. The whole market is getting stratified and we have to differ from what everybody else has on offer.”
The days of a particular model or auto brand selling on its own are well and truly over. Dealerships have to do the whole nine yards to convince a prospective buyer to opt for a particular model against a competing offer.
“On average, the starting point for discounts are about Dh3,000-Dh4,000 and can go up significantly depending on the vehicle and the sticker price,” said Rajaram. “Dealership margins are under pressure across the board — the best one can hope to do in the present market circumstances is either have a slight gain on 2015 unit volumes or maintain the same levels.
“The next year will definitely be challenging and much depends on the pace at which projects are announced for [Expo] 2020. As of now, we are not seeing car rental companies putting up major orders. All of this need to change for the auto retail market to see any sort of recovery.”
Specific to ANA, it recently launched a project to build a 1.3 million square feet pre-delivery inspection and body shop in Dubai Industrial City. It is looking at an early 2017 opening.
“The best part for us is we have already committed the capital-intensive investments that should see us through the near future,” said Rajaram. “This was planned for and done when UAE auto retail sales were turning out double-digit year-on-year gains.
“We have already made some cuts on the inventory side, placing orders more in sync with current demand trends. No dealership will want to get caught with unsold stock — that will be the biggest threat to any business. But I remain the eternal optimist — at some point the market’s headed for an upturn. It’s only waiting for that point to turn up.”
