Al Futtaim Group Case Study Essay Example For Students

Al Futtaim Group Case Study Essay 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 countrys 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 countrys 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 countrys 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 companys 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 44 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 thats not all. Toyotas 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). The Movement Steel Cam Lock EssayBrand 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 44 market, the iconic Land Cruiser continues to significantly dominate the large 44 segment while Toyota monopolises the medium 44 market with the Prado, FJ Cruiser and Fortuner models. We expect Toyotas 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 Cruisers 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 Toyotas 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 years show as Mr Frith joins other industr y experts to discuss sustainable mobility issues in the regions 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.