A FLEET FOR ALL AGES
TBY talks to Imad El-Zein, CEO of Auto World-Sixt Saudi Arabia, on growing market share in challenging circumstances, partnering with world-class players to boost its local presence, and combining better services with lower costs.
BIOGRAPHY
Imad El-Zein is the CEO of Auto World-Sixt Saudi Arabia, one of the pioneers in auto-leasing. He began his studies in the US and his career in Lebanon, and later moved to Saudi Arabia, where he started working in the automotive industry. In his 25 years of experience, he has built a successful portfolio. His strategic planning, marketing, negotiation, and corporate governance skills have attracted many investors. His experience in sales, human resources, and executive committees in the industry played a major role in Auto World’s transformation in fleet size and number of branches.The Saudi Arabian market is the biggest for car rentals in the Middle East. Where does Auto World stand in this market?
Established in 1983 in Al Khobar, by 2007 Auto World had expanded its services to include daily, weekly, and monthly car rentals with a wide-variety fleet mix. It is currently one of the biggest four players in the market. In 2010, our facilities covered 7,500sqm and our fleet size was 2,575 cars, with seven branches in different locations. By 2017, our facilities reached 40,000sqm with a total fleet size exceeding 12,000 vehicles. The company operates nearly 30 branches, mainly in the major cities of KSA.
You recently signed a franchise agreement with Sixt Rent a Car. How will this boost your business?
Sixt, founded in 1912, is a German international car rental company, and the fifth largest in the world, with over 2,000 locations in over 100 countries and a fleet exceeding 180,000. It is one of the largest car rental companies in Europe and the number-one player in the German market. Prior to signing this agreement, Auto World was a local company focusing on the domestic market only. Now we have expanded our operations to the international level with new inbound and outbound sales channels. Potential benefits of this include: an improved market share from inbound and outbound car rental business; the opportunity to enter into cross-border agreements with other franchisees; and access to a worldwide client database in both leasing and car rental.
Greater demand is being driven by religious tourism as well as growth being driven by Vision 2030. How are you preparing for this?
As part of the Vision 2030 plan, economic diversification is one of the key targets. As part of its long-term business plan, Auto World is also applying the same strategy by diversifying its customers from different industries. Besides these efforts, Auto World has already started analyzing the opportunities for improving its operations in religious tourism by creating new synergies with other Sedco Holding companies operating in the industry.
What differentiates you from other established international players in terms of fleet and level of service?
Auto World's greatest advantage is its diversified operations. In the leasing business, we not only lease cars but also give our customers complete after-sales services such as replacement and periodic maintenance.
How do you deliver a high level of service while maintaining your margins?
The increased competition and the downturn in the economy have adversely affected the industry. To cope with this, Auto World has implemented certain cost rationalization strategies to optimize its cost structure, which have enabled the company to keep its margins without sacrificing service for its customers. We have also started implementing a large-scale management change to smooth the transition of our operations, organizational structure, and corporate culture in light of our new partnership with Sixt.
What are your plans and expectations for the year ahead?
The remaining months of 2017 and the following year will be difficult for the industry. Even though the current economic conditions are not in favor of Auto World, the same situation is applicable to all our competitors, so I see this as an opportunity to improve our market share. The companies who are going to survive within this environment without deteriorating their service levels will have a greater chance of growing their market share.
A FLEET FOR ALL AGES
TABLE OF CONTENTS
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