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    Al Futtaim Group Case Study Essay

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    Al Futtaim Motors INTRODUCTION The UAE is to position itself as a regional focal point for the commercial vehicles industry in the Middle East, which is aiming for more major growth as the market recovers from the effects of the global economic crisis. This is already a thriving business in the Middle East, and all the signs point to a great deal of expansion over the next few years as the market recovers from the economic crisis and more manufacturers start production here. The UAE is at the centre of regional growth in the commercial vehicles sector, largely due to the country’s expanding public transport requirements.

    An overview of the Automotive Industry in UAE Auto sales in the UAE are expected to rise 5 per cent between 2009 and 2010 as an easing in liquidity conditions boosts confidence in the sector. 1 A general high-level of disposable income and renewed consumer confidence in the UAE on the back of easing liquidity conditions, provides a favorable background for the auto sector in the coming months. Furthermore, plans for a car production plant in the UAE could help initiate a local automotive manufacturing industry.

    Since the UAE is the fastest growing auto market in the Middle East, the sector is in a position to expand with preliminary plans for a car production plant to help spawn a local auto manufacturing industry already in place. The automotive sector was affected by the financial crisis as banks became more cautious in granting auto loans; but with the UAE accelerating on the path to economic recovery, banks are now being more flexible with auto financing which will no doubt benefit the sector, fuel the demand, and ultimately increase sales.

    The analysis disclosed that it is increasingly apparent that the UAE automotive market is mature, with vehicle ownership rates of over 540 per 1,000 inhabitants a rate that exceeds most of the developing world. Car dealers in the UAE are optimistic on the outlook for the second half of 2009 and are confident that their sales will grow though at a lower rate, in what seems like a challenging year on the back of the global financial crisis. This is primarily down to an easing in lending conditions with banks loosening their belts and imposing lower rates and more lenient requirements on borrowers.

    Over 70 per cent of new car purchases are made on credit in the UAE. The combination of relatively high living standards, a growing population in the UAE, as well as a resurgence in oil prices, have been the key driving forces behind the growth in the auto sector in the UAE. Despite an expected slowdown in auto sales this year, the outlook based on resurgence in consumer demand on the back of a pick-up in the global economy is likely to lead to robust growth in 2010 and beyond.

    Whilst the UAE does not possess a sizable domestic automobile manufacturing capability, its high national wealth has created a niche market for sales of imported vehicles in recent years, and there is a large re-export trade based on the country’s regional status as a key strategic location. Car ownership is expected to rise above 55 per cent this year for the first time in the country’s history. The analysis further revealed that though Abu Dhabi contributes over 55 per cent to overall UAE GDP, its economy is dominated by the energy sector.

    Thus, it is diversified Dubai that is experiencing the most rapid growth, and it has taken a lead in the auto sector, accounting for nearly 50 per cent of the total vehicle stock. EXECUTIVE SUMMARY Al-Futtaim Motors are the sole distributors for Toyota, Lexus and Hino brands in the UAE. Since the company’s inception in 1955 it holds the pre-eminent position of being the largest distributor of automotive products and services in the UAE. In addition, the company holds the distinction of being one of the largest private conglomerates in the gulf region.

    Al Futtaim Motors represent the HINO brand in the UAE since 1985. Hino Division strives to be the first choice provider of products and services to the road transport industry within the United Arab Emirates by providing outstanding quality in our range of products and services. They are the only recognized and established distributor in the UAE who can boast of offering a complete range of Light, Medium and Heavy duty trucks to suit all logistical requirements. Mission

    Our mission is to become the chosen destination for consumers, partners and employees. Values-in-action Our ‘values-in-action’ are listening, learning and leading. We listen because what matters for consumers is what matters for our business. We learn because by learning we grow. We lead because by leading we create tomorrow’s success. COMPANY SUMMARY Established in the 1930s as a trading business, Al-Futtaim is one of the most progressive regional business houses headquartered in Dubai, United Arab Emirates.

    Structured into six divisions; automotive, retail, electronics, engineering and technology, real estate, financial services and general services, Al-Futtaim operates through more than 60 companies and maintains a decentralized approach, giving individual businesses flexibility and versatility to maintain a competitive stance. Products and Services Toyota Toyota cars and 4×4 vehicles have constantly evolved over the years, and have quite rightly become benchmarks in their respective market segments, setting unrivalled standards in the automobile industry.

    A name that spells quality and value for money, Toyota enjoys a majority market share in the highly competitive and consumer conscious UAE market. Each one of its wide spectrum of vehicles is a leader in its class and the first choice of discerning consumers. With an exhaustive range of passenger cars that is designed to satisfy every customer and meet every possible budget, Toyota continues to dominate the UAE roads. Be it the revolutionary Echo, sporty xA, reliable Corolla, elegant Camry, the luxurious Avalon, the spacious Innova, the new Yaris Hatchback to the all new Yaris Sedan, each model is a winner in its class.

    No need to wonder, therefore, why every fourth passenger car in the UAE is a Toyota. For a country that offers a unique off-road experience, Toyota has an impressive line-up of 4 x4s. From the fun machine RAV4, to the affordable Prado, the mighty Landcruiser and the all new Fortuner, Toyota continues to lead the way. And that’s not all. Toyota’s unmatched range also includes light commercial vehicles such as the all New HILUX pickup cabs, vans like the HIACE, and passenger coaches like the COASTER. Toyota engineers have worked long and hard to make the year all models even better (a difficult job by any standards).

    This level of dedication gives Toyota such a strong, competitive edge. A wide choice of models, which meet every individual requirement, superior technological features and specifications, high quality, low overall cost of ownership and legendary resale value, makes every Toyota a sound investment. Al-Futtaim Motors is the largest distributor of automobiles and automotive products in the Emirates, with fully computerized showrooms plus fully equipped service workshops and parts facilities in every emirate. Lexus

    Al-Futtaim Motors has maintained the number one position in the UAE automobile industry by keeping pace not only with the rapid development of the UAE, but also with the technological advances and phenomenal expansion of Toyota / Lexus in Japan. They offer a comprehensive line-up of high-quality Lexus vehicles and automotive products. SALES AND MARKET ANALYSIS “We care, and it shows. ” Al-Futtaim Motors (a member of the Al-Futtaim Group, one of the largest and most successful business houses in the Gulf) is the largest distributor of automobiles and automotive products in the United Arab Emirates.

    They have fully-computerised showrooms, plus fully-equipped service workshops and parts facilities in every emirate. Recognition as the automobile distributor offering ultimate Customer Satisfaction is clearly not only a question of the style, comfort and reliability of the cars – it is also about understanding the specific requirements of their Customers, and responding positively to those needs. An aggressive Customer Satisfaction programme, which is designed to enhance the service levels right across the company, from showroom to workshop, continues to enhance customer relations.

    Their ultimate goal is to consolidate their position as the number one distributor in the UAE in terms of Customer Satisfaction. Marketing Campaigns (See Appendix) BUSINESS STRATEGY AND IMPLEMENTATION Key Development 3M Co. Signs Contract with Al-Futtaim Motors to Provide ‘Sun Control Films’ 3M Co. will now handle tinting for all vehicles sold by Al-Futtaim Motors, giving 3M more than a third of the region’s window-tinting market share.

    On purchase of a new vehicle at an Al-Futtaim Motors’ Toyota showroom or service centre, they offer buyers the option of 3M tinting with its market-leading Crystalline Automotive Window Films, which will be completed before customers receive delivery of their new vehicle. Following the agreement 3M products will be on display at the Al Futtaim Motors’ stand at the Automechanika Middle East Exhibition, which took place from 25-27 May at the Dubai International Convention and Exhibition Centre.

    The exhibition unites market leaders from the automotive sport, workshop equipment, tyres and batteries, parts and systems, repair and maintenance, and accessories and tuning industries worldwide. The four different tinted versions of the Crystalline Automotive Window Films, which offer different levels of glare reduction, were developed using 3M’s leading nanotechnology and feature a proprietary multilayer technology that combines more than 200 layers, to create a film that is thinner than a Post-it Note. 3M’s Crystalline Automotive Window Films block out 99. % of harmful UV rays, with a total Sun Protection Factor (SPF) that exceeds 1,700. In total, the film reduces heat gain by as much as 50%, thus reducing the need for AC to keep the car’s driver and passengers cool. This means less fuel needs to be burned and therefore less carbon will be emitted. This is especially important for vehicles such as SUVs that contain more glass, and thus require more AC during the year-round sunshine. Al-Futtaim Motors Launches New Hino Bus Series at Commercial Vehicles Middle East

    Al-Futtaim Motors has chosen the three day Commercial Vehicle Middle East Exhibition that opens , to launch a new Hino bus range and to display other models that form part of their product range. On display at the exhibition in the Dubai International Convention and Exhibition Centre, is the new Citiliner 60-seater air conditioned bus and the smaller 34-seater Senator bus. These are exhibited alongside other products from BT, Toyota Forklift and Hino trucks that form part of Al-Futtaim Motors’ Commercial Division.

    The two buses launched here are aimed at the staff and school transport segments of the market as well as the tourism market. Al-Futtaim Motors Announces Sales Results for the Month of March 2009 Al-Futtaim Motors announced sales results for the month of March 2009. For the months the company reported that sales rose by 46%, compared to January figures. Lexus SUV sales grew by 118% over the period. Conclusion Year 2009 has been a difficult year for the automobile industry both globally and locally in the Middle East, Toyota has retained its position as the clear number one choice of drivers in theUAE.

    Toyota Motor Corporation is committed in supporting Al-Futtaim Motors, the exclusive partner in the UAE, to still further cement this position in 2010 and beyond. Toyota has been hard hit by the global downturn, as have all the competitors and cost cutting measures has to be taken to sustain the business, however importantly not to cut back on the crucial area of research and development of new products. Critically for this part of the world, this includes the specialist development required to ensure our cars perform to the optimum standard in the harshest conditions.

    New product is the lifeblood of any successful company The company have launched several new and face lifted products in 2009 in the UAE and can confirm that we will continue to introduce new models throughout 2010 and beyond. Toyota also remains totally committed to delivering the best customer experience in the region; by building the most reliable vehicles with lowest cost of ownership; by ensuring the cars are durable enough to withstand all the challenges of the UAE climate. In addition, is by helping their partner to deliver the most professional sales and after sales service to their customers in the UAE.

    Brand new dealership development in Abu Dhabi had been launched which is just one of many investments they are currently making in order to continue to deliver exemplary customer service to all Toyota drivers in the UAE. Expanding on the expansion plans, New product launches are not only news, Al-Futtaim Motors have been making considerable investment in premises designed to offer to customers the best and most convenient service. Opening of new dealership in Abu Dhabi in the new year with the major Motorworld development in the same city are being constructed over the next two years.

    And here in Dubai they are making further investment in aftersales facilities. So whilst many say the economic future remains uncertain we, at Al-Futtaim Motors, are confident of a successful 2010. ” 2009 sales performance Over the past 11 months, 2009 has been a challenging year but sales have now regained a steady pace, with an upward trend in recent months as bank lending and customer confidence have increased. Core vehicles such as the Toyota Camry and Yaris continue to lead their segments with the Camry increasing market share in the large passenger segment.

    Yaris sales now account for half of all cars sold in the small passenger car segment. In the 4×4 market, the iconic Land Cruiser continues to significantly dominate the large 4×4 segment while Toyota monopolises the medium 4×4 market with the Prado, FJ Cruiser and Fortuner models. We expect Toyota’s share of this segment to increase with the recent launch of the fourth generation Land Cruiser Prado, as existing loyal and new customers find the new Land Cruiser Prado offers a perfect blend of on and off-road capability. Motor Show visitors have the chance to test-drive the new Land Cruiser Prado on a urpose built course at the Trade Centre Plaza, outside the Ibis Hotel. Drivers will experience the five speed crawl control on a challenging hill climb and descent and discover the overall vehicle stability through an angled 30 degree side ramp while a series of uneven platforms demonstrate its class-leading wheel articulation. New vehicles unveiled Avid off-road drivers will welcome the news that Al-Futtaim Motors has chosen the Dubai Motor Show to launch new versions of the iconic FJ Cruiser and Land Cruiser models. The FJ “Stealth” model features a cool matt black exterior, tinted windows roof rails, lights and black alloys.

    Overall a slick transformation that is as serious about its appearance as its performance. As Land Cruiser enters its 60th year of production in 2010, Al-Futtaim Motors has teamed up with the renowned 4 wheel drive modification specialists “Arctic Truck”. Arctic Truck has earned its reputation by developing vehicles for the military as well as for expeditions to the harshest places on the planet such as Antarctica and Greenland and has now a modification centre in the UAE where it is developing vehicles to tackle all the Middle East can throw at it!

    The first result of this partnership is the incredible Land Cruiser Xtreme. The imposing Xtreme benefits from 35 inch wheels and a specialist 40 mm suspension lift and up rated shock absorbers which means it takes the Land Cruiser’s already legendary off road performance to another level. These modified vehicles provide an enhanced off-road experience coupled with a unique robust styling that is popular with Toyota enthusiasts. Today, Al-Futtaim Motors proudly presents the Middle East debut of Toyota’s latest developments in the field of sustainable mobility – the i-REAL and the 1/X.

    These vehicles highlight our determination to turn our vision for sustainable mobility into a reality, not just a dream car concept. ” The 1/X (one-tenth) concept completely redefines the meaning of environmental responsibility. The name says it all: a car that weighs a fraction of others in its class today, uses a fraction of the fuel, and produces a fraction of the CO2 emissions. The i-REAL is nearing full utilization giving the opportunity to demonstrate it in action here at the show. Choreographed performances are scheduled for every hour throughout the five day show. The i-REAL, a one-seated, three-wheeled vehicle powered by electricity, can travel up to 30 kilometres on a full battery charge. The vehicle neatly adapts to suit the driving environment transforming from an upright and slow-moving position amongst pedestrians to a lower-angled formation for stable performance at high speeds. These vehicles are particularly pertinent to this year’s show as Mr Frith joins other industry experts to discuss sustainable mobility issues in the region’s first Sustainable Mobility Forum on day three of the Motor Show.

    Toyota is in good shape moving forward into 2010. The new editions to the range that the company is displaying for the first time at the show will help them build on position as the UAE number one. Equally important is the investment in the sales and after-sales facilities for our customers. We have a responsibility to our customers to provide them with the best service in the UAE and with our continued support from the Toyota Motor Corporation, we will continue to strive to do so MANAGEMANT

    Employing in excess of 20, 000 people across the UAE, Bahrain, Kuwait, Qatar, Oman, Egypt, Syria, Pakistan, Singapore and Europe, this approach benefits employees, providing a clearly defined work culture where individuals are empowered with authority and responsibility for their work. The success of Al-Futtaim is attributed to proactively manage change whilst upholding the values of integrity, service and social responsibility. The majority of businesses, built on a portfolio of world leading brands, dominate their sector. Global Learning and Development Manager

    The demand for employee development with emphasis on personal effectiveness and essential business skills has significantly increased in the Middle East. As a result, we engaged Al-Futtaim Training Centre to support this demand by tilizing their trainer resources to deliver GE programmes across the region. The support of a local training partner has enabled us to deliver considerably more courses on-site in the UAE and Qatar, which has resulted in measurably improved leadership skills and higher employee engagement in the region.

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