What are the highlights of H1 2022 for Al-Futtaim Automotive and its brands?
Al-Futtaim Automotive, which provides some of the world’s most recognized automotive brands, services and mobility solutions to customers in the region, reported a strong first half, reflecting the continued rebound in the automotive sector.
According to our latest data, the overall automotive market is up 9.3% from the first six months of 2021.
Our company, whose Al-Futtaim brands include Toyota and Lexus, Trading Enterprises (Honda, Volvo, Jeep, RAM, Dodge) and Polestar, closed the first half with a total market share of 35.4%, selling 40 542 vehicles, up 2,190 units from the first half of 2021. While the luxury vehicle market is down 10.3% overall, Lexus managed to increase its luxury market share by 1 .2%, with the Lexus IS, Lexus LX and the all-new Lexus NX popular models remaining.
The Al-Futtaim Automotive Industrial Equipment division, which represents a multitude of quality brands, also experienced substantial year-over-year growth in the first half of 2022. Its highlights include:
- Serving the UAE’s thriving essential industries of construction, manufacturing, logistics, airlines, e-commerce and public transport; in the first half of 2022, the division recorded a 130% increase in volume year-on-year and a 3% increase in market share in construction equipment
- Toyota Material Handling Equipment saw its volume increase by 65% and its market share increase by 4%
- In the European heavy-duty segment, Volvo Trucks recorded a 38% increase in volume and a 5% increase in market share
- Hino Trucks maintains its market leadership position in the Japanese truck segment and achieves a 3% increase in volume
- Eicher Bus, which continues to secure 25% of Dubai’s public transport bus fleet, 30% of Abu Dhabi’s public transport bus fleet and 50% of Sharjah’s public transport buses by the end of the year, saw its volume increase by 104%. with a 3% increase in market share.
How are diverse mobility, autonomous driving, electrification and connectivity changing the automotive industry and in particular among the automotive brands that are part of Al-Futtaim Automotive?
Al-Futtaim Automotive continues to introduce new products and services to move the UAE forward towards building a more sustainable mobility future and support the UAE’s vision for sustainable development and UAE National Smart Mobility. It currently offers a wide range of hybrid and electric vehicles with demand for these types of vehicles stronger than ever. This can be attributed not only to rising fuel prices helping to accelerate growth, but also to growing customer awareness and acceptance of the technology, environmental benefits, the fun factor of acceleration faster and lower center of gravity and the smooth, quiet ride characteristics of the electric powertrain.
Volvo recently launched the Volvo XC40 Recharge compact SUV and the C40 Recharge compact crossover in the United Arab Emirates, both featuring fully electric powertrains. Although introduced in recent months, there has been strong demand to date with sales following global trends. The Polestar 2, which Al-Futtaim Automotive brought to market with the brand’s entry in February, has sold out completely, reflecting global trends.
How have inflation, rising fuel prices and an emphasis on sustainability impacted the automotive industry?
A number of factors have had an impact on new car prices, but the biggest driver is raw material cost inflation which has put all OEMs under pressure. Additionally, shipping and freight costs have increased significantly over the past 12-18 months. Inflation has gone up – if we look at fuel prices in the UAE or even if you have bought household appliances, you will see that costs have gone up in all areas. Despite rising costs globally for raw materials, supply chains and logistics, we had previously avoided passing on the manufacturer’s unit price increases to its customers.
We always put our customers first, so we have taken all measures to absorb the additional costs we have faced so far. However, in the face of global conditions affecting the automotive industry, we had to adjust the prices of certain models to maintain profitability and sustain our operations. We will, however, limit the impact on our customers wherever possible and we will continue to provide them with an exceptional service and ownership experience, regardless of the challenges we face. We also offer a range of electric and hybrid vehicles that avoid high fuel costs.
What is Al-Futtaim Automotive’s future vision?
Driven by the UAE’s sustainability vision and the UAE’s National Smart Mobility Strategy, Al-Futtaim Automotive will support the UAE’s vision by introducing new products and services to enable the UAE to move towards building a more sustainable mobility future. This UAE strategy offers automakers and dealerships an opportunity to embrace it and be a driver of change to support this vision.
We were one of the pioneers of alternative propulsion in the region when we launched hybrid electric vehicles in the United Arab Emirates in 2008, together with Al-Futtaim Toyota and we continue to supply several alternative powertrains in Al-Futtaim Toyota, Al-Futtaim Lexus, Trading Enterprises Volvo and Polestar.
According to a recent report by Roland Berger, after evaluating 27 target countries on 28 specific criteria, the UAE is now listed as one of the countries where the electrification trend is accelerating. This demonstrates that the UAE’s vision, backed by private companies like Al-Futtaim Automotive, is beginning to bear fruit. China, followed by the United States and Germany, is in the top three.
The demand for electric vehicles is stronger than it has ever been. This can be attributed not only to high fuel prices, which help accelerate growth, but also to growing customer awareness and acceptance of the technology, environmental benefits, the fun factor of faster acceleration and lower center of gravity. and the smooth, quiet ride characteristics of the electric powertrain. The UAE Net Zero strategy offers automakers and dealerships the opportunity to embrace it and be an engine of change to support this vision.
For our part, Al-Futtaim’s entrepreneurial spirit and relentless customer focus enable us to grow and develop, meeting the changing needs of our customers through digitized services and hybrid and electric offerings. We got off to a strong start and can assure our customers that we will continue to provide the products and services they want and need.
Beyond the vehicles we make available, we also offer alternative driving modes. In October last year, we announced the launch of our new car subscription service, MOOV By Al-Futtaim, aimed at providing convenient and sustainable mobility for growing customer demand across the UAE.
By taking out a short-term, no-commitment subscription, users can access a wide variety of car models, including hybrid vehicle options (Toyota CHR, Toyota Corolla Cross and Toyota Camry available now, with Toyota Highlander Hybrid in July), and from the third quarter, electric vehicles will also be available, making Moov by Al-Futtaim, the first car subscription service, with electric cars in its fleet. All cars are 100 point checked and delivered straight to their doorstep at no extra cost.
Approximately 25% of the fleet on MOOV is hybrid with 100% utilization and we have seen an increase in customer demand for hybrid vehicles. MOOV has the ability to capture registered customer interest in vehicles sold such as our hybrid vehicles. We currently have a waiting list of customers who have requested to upgrade their current subscription from gasoline to hybrid.
Based on strong demand, we have several exciting new hybrid vehicles coming to MOOV in the coming weeks and our first EV model arriving in Q3. We’ll have more to reveal in the months to come.
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