‘Saudi market accounts for 13% of Audi’s Mideast sales’

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Executive office on wheels.
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The new Audi A8.
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Enrico Atanasio poses with the Q7.
Updated 12 August 2017
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‘Saudi market accounts for 13% of Audi’s Mideast sales’

The Saudi market accounts for 13 percent of regional Audi sales, and premium Audi models such as the Q7 and the A8 are best sellers in the market, according to Enrico Atanasio, regional Audi director. In an exclusive interview with Arab News, Atanasio disclosed that the regional markets have been challenging this year but new models by the company had a positive impact on the business. He is hopeful that the new A8, recently revealed and due in the markets by the end of this year, would lead sales upwards in 2018.

These are highlights of the interview:
How has Audi performed in the regional GCC markets in 2017 and how is the Saudi market doing this year for Audi?
The market has been challenging this year due to the economic situation and political instability in some markets, but Audi has continued to introduce new models such as the Q2 at the beginning of the year, the A5 and S5, the TT RS and the RS 3 Sedan. In quarter three of 2017, the all-new Audi Q5 will arrive so this will have a great positive impact on our business. In terms of sales, while we are not at the levels of last year overall, models such as the A4 have seen a 15 percent increase in popularity with the new model introduction and the Audi R8, which was nominated as the Middle East Car of the Year this year, has enjoyed a 50 percent increase in sales. Saudi Arabia accounts for 13 percent of our regional sales in the Middle East, but here the A4 showed a 23 percent increase in sales due to the popularity of the sedan in the Kingdom.

Audi has revealed the e-tron series in the past few months; do you see prospects of such electric models coming to the region?
Yes, the e-tron had been a very successful range in Europe where the appetite for alternative fuel is high and where the markets are advanced in the provision of facilities to charge and service these vehicles. We see good opportunities for these models in the Middle East in the future but only when the infrastructure is advanced enough to cope with the charging requirements of such models and our dealers are equipped to handle their maintenance. Our Audi Q7 is the best-selling model here accounting for 30 percent of our sales and is followed by the luxury model A8. We are very excited to see this recently announced new model in our market next year.

What new Audi products are likely to be launched in the region in the next 12 months?
The TT RS and the RS 3 Sedan models are just arriving with our dealers now and the all-new Audi Q5 will be an exciting edition to the Audi family from September this year. We are also looking forward to the arrival of the R8 Spyder and the RS 5 at the end of the year.

Do you see a need for regional authorities to start building the necessary infrastructure for alternative energy vehicles?
We are working closely with the authorities to explore new charging opportunities for electric cars and there is also good progress on the adoption of legislation for autonomous vehicles in the future in the UAE. The challenges of an extremely hot climate mean that we have to make sure these cars are fully tested and approved to perform to the standards expected by our customers. As soon as we are certain that all of these requirements are met, we will introduce these models into the market, but we cannot put a date on that at the moment.

What are your best-selling models in the region and do you see this pattern changing in the foreseeable future?
The Q7, Q5 and Q3 make up the majority of our sales with 39 percent, followed by the A8. Our customer demands a premium car that offers sophistication, sportiness and progressive technology. The Middle East is one of the biggest markets in the world for sales of the Audi R8.

What new technologies will be included in the new Audi A8?
The new A8 is an important driver of innovation and heralds a new design era with exterior and interior styling for Audi. The new A8 has also been developed for highly automated driving (level three). In 2018, we will begin gradual volume production of the piloted driving functions.
In addition, the new A8 will feature many other innovations such as a 48-volt main vehicle electrical system, Audi AI active suspension and Audi wireless charging, to name a few. The new Audi A8 also features 41 assistance systems, which surpasses all previous totals in our product line.

Do you see a future for self-driven Audi cars in the Gulf region?
Yes, the autonomous car gives the customer what we call the “25th Hour.” It will allow people to live their lives in a new way and give them more time to work and relax. The A8 is the first car to offer level-three capabilities in the field of autonomous driving and we are encouraged to see that there is good progress in the discussions to approve legislation that allows autonomous cars to be accepted on the roads in the UAE.
With its “25th Hour” project, Audi is enabling its customers to be fully in control of how they use their time in cars. Personal preferences are the focal point of the project. The car interior adapts itself to users’ needs and desires, allowing them to enjoy optimal relaxation, spend time with family and friends without being disturbed.


INTERVIEW: Dan Balmer on steering Aston Martin beyond Bond in the Middle East

Dan Balmer
Updated 17 November 2018
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INTERVIEW: Dan Balmer on steering Aston Martin beyond Bond in the Middle East

  • The Middle East will be a key market for the iconic UK car maker’s second century, says regional chief Dan Balmer
  • Aston has been around for more than 100 years, but has embarked on an ambitious “second-century strategy” under group CEO Andy Palmer

The name is Balmer. Dan Balmer.

The new president of Middle East business for Aston Martin Lagonda, the iconic British car maker beloved by James Bond, is grateful for the glamorous legacy of the fictional super-spy, but also conscious of the need to move on.

“We’ve been with Bond for 50 years, and he has been a real asset for us. But we have a team internally called ‘Beyond Bond.’ If we want to grow the brand audience, into the family and female markets, we have to look beyond the cars that Bond drives,” said Balmer.

That move away from some aspects of Aston’s heritage is reflected across the whole company. Aston has been around for more than 100 years, but has embarked on an ambitious “second-century strategy” under group CEO Andy Palmer.

The company that is emerging will be different, a luxury brand rather than a mere maker of fast boys’ toys; it will be increasingly global, with the Middle East playing a central role; and it will — hopefully — be sustainable, in both a financial and environmental sense.

British actor Roger Moore stands beside an Aston Martin car during a 'James Bond photocall' at Bletchley Park in Milton Keynes, on October 17, 2008. (AFP)

Palmer’s strategy is to steer the group away from the boom-and-bust cycle — it went bankrupt seven times in its first century. He pulled off an essential part of that strategy with an initial public offering (IPO) on the London Stock Exchange last month, which valued the company at $5.6 billion.

Aston will continue to make fast cars, but they will increasingly be more fuel efficient and even electric; and it will put its name to other luxury merchandise — plans for apartments and speed boats are well advanced. Next on the luxury list of Aston-branded items are submarines and vertical take-off aircraft.

Bond, with his love of both the high life and high-tech gadgetry, would probably approve of the strategy. “We’re not hawking the brand around — you won’t see us doing aftershaves and umbrellas. But customers want to buy our cars because they want to buy into beauty, and we’re stretching that now into other areas,” Balmer said.

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BIO: 

BORN 

1976 Southampton, UK.

EDUCATION

Design technician apprentice, Rover Group.


CAREER

•BMW design engineer.

•Rolls-Royce Motor Cars, general manager in Asia-Pacific. 

•Aston Martin Lagonda, president for the UK and
South Africa.

•Aston Martin Lagonda, president for the Middle East, North Africa and Turkey.

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He knows a thing or two about luxury marketing and car design, having previously worked for Rolls-Royce in Asia, based out of Singapore. But now the challenge is to extend the Aston business in the Middle East in a new division within the global set up — covering the Middle East, North Africa and Turkey (MENAT).

Reflecting Aston’s traditional regional business hub in the region, he will be based in the UAE, but the headquarters has been moved from Dubai to Abu Dhabi, where the MENAT HQ was officially inaugurated last week.

Balmer feels that Dubai’s reputation for flash glamor is “a thing of the past,” but also believes that the UAE capital is more in tune with the Aston image. “Aston has an understated elegance and that is also how we feel about Abu Dhabi. It is the capital, recognized as the center of the financial scene, the big decisions are made here, and with Yas Island (the venue for the big Formula 1 Grand Prix later this month) it is a great location for motor sports.”

The Aston Martin DB10, built exclusively for the James Bond film "Spectre," is displayed at the 2015 Los Angeles Auto Show in Los Angeles, California, November 19, 2015. (AFP)

Track racing is still a big thing for Aston, not least because many of its cars are too fast to be driven flat out on roads, but also because it helps the company maintain its high-speed image against competitors such as Ferrari and Lamborghini, the UAE’s sports cars of choice.

Under the second-century strategy, Aston can offer the DB11, the DBS (“a boot in a suit” says Balmer), the Vantage and the Valkyrie as its “overtly aggressive” cars to rival the Italians, and will also soon begin to produce a range of mid-engined cars to take on the likes of Porsche and Mercedes.

Saudi Arabia is big on collectors’ cars, like our Vulcan. But we need to grow the brand.

 

“We are breaking out of our conservative shell. These are track-based products, but meant to be driven on the road, true sports cars,” Balmer said.

But the really radical product is yet to come, and will figure prominently on Middle East roads when it arrives, some time in 2020. Aston has hitherto held off entering the SUV market, which is the fastest-growing sector in the world’s biggest markets, like the US and China.

The DBX is a luxury SUV, a bit bigger than most on the roads now, with five doors and elegant lines. It is aimed at the upmarket family market, and seems a natural fit for the Middle East, which has been SUV-crazy for decades. 

Balmer thinks it will become Aston’s biggest seller in the region. “We just have not had the offering in that segment before, but in the Middle East a majority of luxury car buyers would be SUV, with sports cars a weekend plaything,” he said.

In this file photo, an Aston Martin DB5 is displayed as part of an exhibition dedicated to James Bond at the main hall of La Vilette in Paris. (AFP)

He is relishing the prospect of unleashing the DBX on Saudi Arabia. Aston has been in the Kingdom a long time, with a long-standing partner the Hajji Husein Alireza group and showrooms in Jeddah and (more recently) Riyadh, to be followed by an outlet in Alkhobar.

But Saudi Arabia has not lived up to the potential of its big wealthy population. It ranks behind the UAE, Kuwait and Qatar, roughly alongside Turkey in Aston’s regional sales rankings.

“Saudi Arabia has more opportunity for us. Because of the sheer weight of wealthy individuals it means there are more people who will buy our cars there. Saudi Arabia is big on collectors’ cars, like our Vulcan, and the other beautiful cars we produce like Vanquish and DBS. But we need to grow the brand,” Balmer said.

 

 

“We need to do an education job in Saudi Arabia, both in terms of what Aston stands for in the market and the new products as well. I think Saudis will go for the idea of DBX, and that’s where the key focus will be for us.”

He believes the Saudi market is perhaps more conservative than the UAE in terms of colors and models, but there is potentially a far bigger market among Saudi nationals than Emiratis.

Saudis buy Rolls-Royce cars in big numbers, and having worked for the leader in motoring luxury Balmer appreciates the difference between marketing Rolls and Aston. “They differ in the customer type. Aston buyers tend to be really into their cars. They are ‘petrol heads’ but also discerning.

“Rolls customers know their cars too, and might have an Aston in the garage as well, but they’re buying a Rolls-Royce as more a statement purpose — for business use, or a reward in life. An Aston is more a purchase of emotion and desire,” he said. Whether as a reward or out of emotion, buying an Aston is a considerable outlay. The average price ticket is around $175,000, and such an impulse purchase could easily be put off if personal economic circumstances took a downturn.

In the Middle East, where economies are tied to the oil price, that makes Aston subject to the vagaries of the global crude market. “What’s happening in the region is that governments are diversifying away from oil. (Saudi Arabia’s reform program) Vision 2030, for example, is a big change and good news for us. It will eventually take the volatility away from the macro economic environment. But we will always be dependent to some degree on global economic forces. China now drives the rest of the world in many respects,” Balmer said.

The IPO was an opportunity for Aston’s long-term backers — financial institutions from Italy and Kuwait — to realize some profits on their investments. The share sale raised no new money for expensive research and development, which some analysts criticized.

“There was no massive cash injection because all our new projects were already invested. And we’re making profits. But the IPO secures the long-term future of the company,” Balmer said.

In difficult global markets, the shares have been trading below the issue price since day one, but recently two big investment institutions — Merrill Lynch and Goldman Sachs — put them on the “buy” list. If they achieve sufficient value to be included in the main FTSE 100 list, Aston will be the first car company for 30 years to be on the UK’s main trading board.

That would be something of a triumph for Palmer and the second-century strategy, but Aston has another finishing line in sight before that: The Abu Dhabi Grand Prix. “We’ve got a number of things planned around the race, not least winning it,” Balmer said.