Al-Futtaim Automotive’s Vincent Wijnen on the factors driving the company’s performance in H1 2022 and its future plans

What are the key highlights of H1 2022 for Al-Futtaim Automotive and its brands?
Al-Futtaim Automotive, which provides some of the world’s most-recognised automotive brands, services and mobility solutions to customers across the region, has revealed a strong first half of the year, reflecting the ongoing rebound of the automotive sector.

According to our latest data, the overall automotive market is up 9.3 per cent compared to the first six months of 2021.

Our company, which counts Al-Futtaim Toyota and Lexus, Trading Enterprises (Honda, Volvo, Jeep, RAM, Dodge) and Polestar amongst its brands, closed out the first half of the year with a total market share of 35.4 per cent, selling 40,542 vehicles, up 2,190 units versus first half of 2021. While the luxury vehicle market is down 10.3 per cent overall, Lexus managed to increase its luxury market share by 1.2 per cent, with the Lexus IS, Lexus LX and all-new Lexus NX remaining popular models.

The Al-Futtaim Automotive Industrial Equipment Division, which represents a multitude of quality brands has also witnessed substantial year-on-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 H1 2022 the division saw 130 per cent increase in volume year-on-year and 3 per cent increase in market share in construction equipment
• Toyota Material Handling Equipment saw a 65 per cent increase in volume with a 4 per cent increase in market share
• In the European Truck segment, Volvo Trucks saw a 38 per cent volume increase and 5p er cent market share enhancement
• Hino Trucks continues its market lead in the Japanese Trucks segment and achieved a 3 per cent increase in volume
• A 104 per cent volume increase with a 3 per cent market share increase with Eicher Bus
• A continued 25 per cent of the Dubai Public Transport Buses fleet, 30 per cent of Abu Dhabi’s Public Transport Buses Fleet and a projected 50 per cent of Sharjah’s Public Transport Buses by year-end

How are diverse mobility, autonomous driving, electrification and connectivity changing the automotive industry and particularly among the auto brands that are part of Al-Futtaim Automotive?
Al-Futtaim Automotive continues to introduce new products and services to keep the UAE moving towards building a more sustainable future of mobility and support the UAE’s vision for sustainable development and the UAE National Smart Mobility. It currently offers a wide range of hybrid and electrical vehicles with demand for these types of vehicles stronger than it has ever been. This can be attributed not just to rising fuel prices, which are helping to accelerate the growth, but also due to growing customer awareness and acceptance of the technology, the environmental advantages, the fun factor of the faster acceleration and lower centre of gravity and the smooth and silent driving characteristics of the electric powertrain.

Trading Enterprises Volvo recently launched the Volvo XC40 Recharge compact SUV and the C40 Recharge compact crossover in the UAE, both of which feature fully electric powertrains. While introduced in the last few months, there has been strong demand to date with sales following global trends. The Polestar 2, which Al-Futtaim Automotive brought to the market along with the brand’s entry in February, has completely sold out of all stock reflecting global trends.

How has inflation, rising fuel prices and focus on sustainability impacted the auto industry?
A number of factors have impacted new cars prices, but the primary factor is the raw material cost inflation that has put all OEMs under pressure. In addition, shipping and freight costs have increased considerably in the last 12 to 18 months. Inflation has been on the rise – if we look at fuel prices in UAE or even if you bought any home appliances, you’ll see that the costs have increased across the board. Despite the increased costs being experienced globally across raw materials, supply chains and logistics, We had previously avoided passing the increased prices for units from the manufacturer onto its customers.

We always put our customers first, so we have taken every measure to absorb the added costs we have faced so far. However, in the face of the global conditions affecting the automotive industry, we have 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 offer them an exceptional service and ownership experience, no matter the challenges we face. We also offer a range of EV and hybrid vehicles which avoid high fuel costs.

What is the future vision for Al-Futtaim Automotive?
Driven by the UAE’s vision for sustainable development and the UAE National Smart Mobility strategy, Al-Futtaim Automotive will support the UAE vision by introducing new products and services to keep the UAE moving towards building a more sustainable future of mobility. This UAE strategy brings an opportunity for automotive manufacturers and dealerships to embrace it and be a driver of change to support this vision.

We were one of the pioneers in alternate propulsion in the region when we launched Hybrid Electric Vehicles in the UAE back in 2008, with Al-Futtaim Toyota and we continue to provide several alternative powertrains throughout Al-Futtaim Toyota, Al-Futtaim Lexus, Trading Enterprises Volvo and Polestar.

According to a recent report by Roland Berger, after evaluating 27 focus countries on 28 specific criteria, the UAE is now listed as one of countries where the electrification trend is picking up. This demonstrates that the UAE’s vision, supported by private companies such as Al-Futtaim Automotive is starting to bear results.  China, followed by the US and Germany make up the top three.

Demand for electric vehicles is stronger than it has ever been. This can be attributed not just to the high fuel prices, which are helping to accelerate the growth, but also due to the growing customer awareness and acceptance of the technology, the environmental advantages, the fun factor of the faster acceleration and lower centre of gravity and the smooth and silent driving characteristics of the electric powertrain. The UAE’s Net Zero strategy brings an opportunity for automotive manufacturers and dealerships to embrace it and be a driver of change to support this vision.

On our part, Al-Futtaim’s entrepreneurship and relentless customer focus enables us to grow and expand, responding to the changing needs of our customers through digitised services and hybrid and electric offerings. We have started strongly and can assure customers we will continue introducing products and services that they want and need.

Beyond the vehicles we provide, we also offer alternative ways to drive. 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 the growing demand from customers across the UAE.

By taking a short-term and no-commitment subscription, users can access a wide variety of car models, including options of hybrid vehicles (Toyota CHR, Toyota Corolla Cross and Toyota Camry available now, with Toyota Highlander Hybrid in July), and beginning of Q3, 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 door at no extra charge.

Approximately 25 per cent of the fleet on MOOV is hybrid with 100 per cent utilisation and we have seen an increase in customer demand in hybrid vehicles. MOOV has the ability to capture the customers’ registered interest on vehicles sold out such as our Hybrid vehicles. We currently have a waiting list of customers who have requested to switch over their current subscription from petrol to hybrid.

Based on the high demand we have several exciting new hybrid vehicles coming in to MOOV in the next few weeks and the arrival of our first EV model in Q3. We will have more to reveal in the coming months.