TBY talks to K. Rajaram, CEO, Al Nabooda Automobiles, on the key strategies for marketing and selling luxury cars in Dubai.
TBY What is the essence of Al Nabooda’s success?
K. RAJARAM We sell cars starting from the AED100,000 range up to AED3 million. If you want to succeed in this market, you have to give the buyer an experience that is unique. He is not buying an ordinary car; he is buying an exclusive experience. What we have learned is that you have to put money into infrastructure, high-quality workshops, facilities, and showrooms, as people want that after having paid this kind of money.
What does your future roll out strategy look like?
In Sharjah, we are building three showrooms and workshops. They will be opened three months after the opening of our Fujairah facilities. The Audi showroom will be ready by the end of 2012. Currently we have 800 employees, and by the end of 2012 we will have more than 1,000.
How do you compare the micro markets under your dealership?
All of them are growing, especially Fujairah. We have seen tremendous growth in the past six or seven months. A huge city center built by Al-Futtaim Group is coming up, and a new road is being built. Starting from February 2012, driving time from Dubai to Fujairah takes just 35 minutes. Abu Dhabi is building an oil and gas pipeline direct to Fujairah to pump out oil and gas for export directly from there instead of coming around the Gulf. A lot is happening in Fujairah. Sharjah has always shown good expansion, too. We have a large customer base in Sharjah. We already had a center there, but it was a small showroom. Now we are building a proper facility.
How do you compare your brands vis-à-vis your competitors?
We have done a little better than most of them. In 2010 the Japanese had an over-stocking problem. We never had such an issue except for the first few months of the crisis. We sell all of our cars, and all our customers are on a waiting list. You cannot walk into my showroom and buy a car. In both middle and premium classes the demand is all around. The automobile industry has been extremely strong in 2011, and we have seen tremendous growth. The industry was set back a little because of the earthquake in Japan, as the Japanese automotive industry caters to the global automobile industry. The entire car business has grown tremendously. We set a record in August by selling 217 Porches in a month, which has never been done in the history of Porsche.
How do you evaluate the regulatory framework in Dubai?
There is a regulatory framework called the GCC Regulations, which define the requirements for automobiles in the GCC region. This is a standard applied Gulf wide. Any manufacturer or dealer operating in the GCC automobile sector needs to comply with them.
From where do you receive your products?
We receive cars from various manufacturing facilities around the world. It depends on the model. For instance, VW has 30 plants around the world. We get the new Jetta from the US, Beetle from Mexico, Amarok from Argentina, Touareg from Bratislava, and Golf from Germany. Essentially, we deal with VW Germany. What is more, Dubai’s import procedures are fantastic. We all have accounts with customs, and nothing waits at the port. If a car lands at 11:00 am, it is in my workshop by 12:30 pm in the afternoon.
What is your outlook for the short term?
We are extremely surprised with the buoyancy of the market. We did not assume that we would be in a position where we would have no stock. On December 31 we ended 2011 with virtually no stock. In the car market we see that the Korean brands are growing very aggressively. They are eating away the market share of Japanese cars.
© The Business Year