Al-Futtaim Automotive has revealed that it is geared up to log in strong numbers in 2021 for its Toyota and Lexus brands, driven by consumer optimism as the automotive sector slowly recovers from the Covid-19 pandemic.
“People are spending on new products; they are spending on new technology; and they are spending on personal transportation,” said Andy Barratt, MD of Al-Futtaim Lexus and Al-Futtaim Toyota. “Despite a challenging year and slowing car sales in the region, Al-Futtaim Automotive increased sales across two of its key brands off the back of the introduction of innovative and much-anticipated enthusiast products.”
Speaking to the media at an event on Sunday, Barratt noted that the increase in sales is a direct result of the company’s continued commitment to customers. “We have started strong and can assure customers of lots more exciting products for the rest of the year.”
The company revealed that new SUV models, including the CHR and Toyota Highlander, were responsible for driving the growth for Al-Futtaim Toyota with sales up 6.7 per cent and 2.8 per cent respectively year on year. Al-Futtaim Lexus sales increased by 14 per cent in February 2021 and the market share is up from 18 per cent in January 2021 to 20 per cent in February 2021. The sales growth increase in February 2021 was supported by the LX570, with sales up eight per cent respectively month on month.
“Al Futtaim are really part of the fabric of the community,” Barratt said. “Our job is to fuel the economy and keep it moving. There is no doubt that people are starting to spend money again. The economy is starting to see green shoots of recovery. Our retail sales for people that want to buy a Toyota for themselves are up 20 per cent versus 2019. This is against a market that is still not at that 2019 level.”
He also explained that customers are making bigger purchases because they want to be “independently in control” of their travel. “Coming out of Covid-19, people want to travel in their own space, and we have observed this is to be a global phenomenon. People are investing in their own travel because they want to be in their own safe environment.”
Al Futtaim’s latest statistics also showed that pick ups continue to dominate the UAE market, with the market share increasing to 48 per cent in February 2021, up 16.8 per cent versus February 2020. The Toyota Hilux, which was made available as a retail model for the first time in 2020, outperformed February 2020 sales by 13 per cent. Al-Futtaim Toyota’s strong focus on Hiace Vans and commuters has also helped to increase Toyota’s van market share to 58.3 per cent, up 8.5 per cent from the same time last year. Meanwhile, Lexus’ flagship SUV and main volume contributor, the LX570, continues to dominate the large SUV segment, with over 50 per cent market share, an increase of three per cent in February 2021 over January 2021.
Barratt also described how a “sense of optimism” is returning to the business community. “When you look at the UAE and what is happening here with Expo 2020 Dubai, and a lot of other things, that sense of optimism here is much greater than anywhere else in the world. We are starting to see a growth in business as we come out of Covid-19; people are investing more in their business and equipment.”
Responding to a question about recent vehicle recalls, he reassured consumers that when there is doubt around the durability of a component over a longer life period, Al Futtaim’s approach has always been “preventive” and that the recalls are all a result of more stringent quality decisions. “A lot of the work that you see on recalls is around predictive failure rather than actual failure; we prevent it from failing rather than allow it to fail. We know that recalls are always terribly inconvenient for the customer, so our job is to make it as painless as possible.”
Towards this end, and as part of the company’s digital transformation and customer experience drive, Al Futtaim Automotive will be launching its mobile servicing initiative. “We will be rolling out a Mobile Workshop by the end of this quarter, which is Toyota and Lexus specific, so if you have a recall, we will come to you at a place of your convenience and service you.”
Looking ahead, he pointed to various trends that are capturing the attention of consumers. One of these trends revolves around electrified vehicles – fully electric or hybrids. “We are definitely seeing a growth of people making what we consider to be an intelligent choice.”
Barratt also highlighted developments in the Hydrogen vehicle segment. “Currently, we have around 60 Toyota Mirai in the UAE. Toyota is really investing heavily in the segment as they believe that it is a significant part of the future. What is really exciting about the UAE is that it decides on a direction to travel and then really delivers it, better than anywhere else in the world. We will see more of these vehicles coming up in both Abu Dhabi and Dubai in tandem with the increased investments in the technology and infrastructure. Hydrogen definitely has a role to play in the future, mostly in the commercial segment.”
The same is true for autonomous vehicles, he said. “Autonomous vehicles have seen lots of investments going in all over the world. The technology is present, and has been for a while, but what is going to be key is mapping – specifically, city mapping – and how both autonomous and non-autonomous vehicles will work together. What will happen is that once autonomous vehicles arrive on the road, and this is still a ways away, they will appear mostly on major commuter routes because they are the ones that are properly mapped. There is no doubt that the industry is getting ready for a fully electric and autonomous vehicle that doesn’t even have any driver interface – you simply get in and it takes you where you want to go.”