Dubai
The Gulf’s automotive dealerships need to stop obsessing about double-digit volume growth each year — there are other ways to squeeze out decent margins. A newly minted consultancy and its founder believe they can provide the difference.
“We can come in with the diagnostics and put in place industry best practices that will help with profitability,” said Karl Hamer of Adamas Consultants. “If there are warning signs flashing red, we could turn them to yellow and the green. And these can be achieved without being under the burden of trying to increase volumes.”
Hamer’s got the background for this — until recently, he headed the motoring interests at Al Habtoor Group, whose interests straddled volumes brands such as Mitsubishi and a couple of Chinese brands to the rarefied Bentleys and McLarens. Before that, he had a tenure at a publicly listed company in the UK.
The region’s auto retail industry has had a tough time of it in 2016, with volume declines in the 20-30 per cent. The first three months of this year have been just as dire, with consumers definitely not placing buying cars at the top of their must-do list. That makes the present as good a time to make changes.
“More pressure brings forward the need for more governance,” said Hamer. “There’s a tendency among businesses in the region to bring in consultancies or traditional accounting firms from Europe or the US to find solutions for what are local issues. I have been in the region for 10 years and felt the market could always do with someone from the motoring industry itself.
“These are markets where the Porsche and Bentley dealerships in the UAE have been the most successful in the world; the Saudi Toyota dealer sells the number one in the world,” said Hamer, who has already picked up his first project — to oversee the prospects for dealerships in Vietnam for a manufacturer. “Regional dealers already know how to sell cars in great numbers ... we are here to help with more subtle changes.
“The second-half of the year should be interesting, especially the Q4, with corporate buyers likely to be active ahead of the VAT introduction.”
