Interview with Saud Abbasi, General Manager, Al-Futtaim Motors-Lexus
Another in our series of interviews with senior car guys about the state of the industry as we head into 2012
By Shahzad Sheikh
Q. Whilst initial expectations for 2011 were optimistic, it appears to have been a case of a stalled recovery with political unrest across the region, a natural disaster in Japan severely impacting the car industry, and fears of a double dip recession causing buyers to put off purchases. Now in the final quarter, do you find things are better, worst or about what you expected for the year?
The year began extremely well but then we had the unfortunate Japanese double calamity which had a direct effect on sales. However, since Ramadan the sales momentum has started getting better and we are very optimistic about how the fourth quarter will end this year.
Q. What changes in strategy, if any, did you have to employ to cope with the changing situation and unsettling events of the 2011?
We have a long term vision on where we need to get to and the strategy to support it. As long as we are on the right track for the long term, short term adjustments will continue to be made. We are indeed lucky to be part of the Al-Futtaim Group which allows for a very steadfast approach to business. In fact, we used this unsettled time to focus more on enhancing the platform that will support our business growth. This includes growing our organization, investing in training our Associates, and planning out our new infrastructure.
LS600h
Q. In the retail environment in the UAE what have been the major developments this year, particularly in light of the new finance rules requiring buyers to have a minimum 20% deposit on new car financing?
It’s difficult to isolate the impact of the new Central bank rule because the dual disaster which struck Japan affected our inventory supply around the same time. If you look at the end of the third quarter and the beginning of the fourth quarter, things seem to be settling down and people seem to be adjusting. The effect of course on the luxury market is a little less than on the mass auto market; however some of our customers are having a challenge in trying to afford our entry-level segment of the Lexus brand. But we are working on ways to help our customers ride over any difficulties they might have in this regard.
The IS-F, one of Shahzad's favourites!
Q. Has there been any apparent shift in the demands, needs and requirements of customers? Are they buying more used cars, are they chasing more incentives, are they negotiating more, are they playing hard to get?
There is definitely more competition in the luxury space in this market. But in general I think customers have a better time when competition escalates. Every brand will work harder to maintain or even gain a larger market share during high competition. So it is not a change in the customer’s behaviour; it is the market that’s evolving its behaviour i.e. you now have to earn the business which earlier was taken for granted. As far as Lexus is concerned, our team is putting all necessary efforts to maintain and even enhance our offerings, but I can say there is no change in the behavior.
Entry level Lexus - the CT200h
Q. Is new product still helping you get customers into the showrooms?
Customers always want to test a new product when it’s available. That’s always been the case and it will stay that way. What we at Lexus are doing is that we are widening the entry-level choices to our customers. We have seen this happen when we first introduced the compact premium hybrid, CT200h.
All new Lexus GS launched at the Dubai Motor Show
Q. Have you had to work harder at marketing your products and brand this year? What’s been the most effective way to deploy your advertising spend this year?
The Tsunami and earthquake that hit Japan affected our supply, which necessitated adjustment to our marketing strategy. With supply back to normal in Q3, we have been able to return to our original plans. Our key focus is to actually interact with our customers on a one to one level. For example we will be conducting test drive projects with the aim of getting customers to experience Lexus unique driving pleasure. So our marketing efforts are very much focused on the overall Lexus experience, rather than just a select few advertising channels.
LFA Supercar
Q. Looking ahead, what are your realistic expectations for 2012?
2010 was a good year, and 2011, despite the Tsunami is even better than 2010. Year on year we are around 7% higher. We anticipate promising times in the next three months and this will only be the start. 2012 will be an extremely exciting year for Lexus, with major changes happening on many levels, from completely redesigned car models to enhanced and new facilities and improved customer care.
