'Car market to grow 10% in 2008'

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With 50 years behind it, Gargash Enterprises has a long history in the UAE – and its business continues to grow.

Last year, the Mercedes dealer saw sales of new vehicles increase by 10 per cent, or 5,500 cars, with its commercial arm and after-sales up 18 per cent and 26 per cent respectively – indeed, a healthy situation for the group’s new general manager, Ewan Ramsey, to take over.

Ramsey (pictured above) took charge in October after being lured to the UAE from the United Kingdom where he worked as general manager of Honda UK. As Gargash enters its sixth decade, the Briton is inheriting a very different company than the one established by the late Ali Gargash.

Today motoring is as much about helping the environment as it is about buying the car to match your status. As Ramsey sits down in his vast office in Deira, Emirates Business discovers where the company is going under his leadership and what customers can expect to be driving this year.

What are the reasons behind last year’s growth – is it simply down to an expanding population?

The marketplace has grown so we are in line with the general economic growth of Dubai and the Northern Emirates. Secondly the product has expanded over the past few years and there have been a number of new models, in particular the C Class last year.

Do you expect this growth to continue in 2008?

The UAE is not like Europe where you have everything right down to the last detail but I think the car market will continue to grow about 10 per cent, driven not just by the economy and GDP but also by new models being introduced by ourselves and our competitors.

How important is the UAE and Middle East to Mercedes?

On a global basis, clearly it’s not a substantial volume. In the Middle East there were about 16,000 new cars sold last year and you’re talking about a brand that sells close to 2.2 million worldwide. But it is important in terms of future development and growth. Dubai is the conduit between Asia and Europe so it’s becoming far more important on a world basis.

You worked in Australia and the United Kingdom before coming to Dubai. How does the industry differ between here and around the world?

In the UK the emphasis of most CEOs is on managing costs, but in a market such as this you have to make forward investment in order to keep up demand, and you have to be making demands to make sure you are taking opportunities. Here, the challenges are keeping pace with market growth. There’s more of a market-driven culture in organisations here as opposed to a financial one like in the UK. One of the other key focuses is human resource and ensuring you have capable management who can operate in a market such as the UAE. You have also got to have a labour resource to meet the growing demand we are experiencing here.

Are you struggling to find staff?

In some sectors we are, but I would not call it a struggle, it’s more that I can see some challenges in the future. In terms of securing good sales people, there’s no doubt we’re competing more and more with the construction and property industries and it’s probably to be expected that we will lose some staff there. On the technical side, it’s becoming more challenging to acquire highly skilled technicians. In terms of senior management, as you can imagine most of the team are British, and what we’d like to see is a focus on Emiratis. We are already exceeding our government quotas, but this is an area, but we need to focus on integrating multi-cultural management.

What new models do you have coming out this year?

The CLC is coming out in the first to second quarter and we’ll be adding a new member to the SUV family when the GLK comes out towards the end of the year. The CLS, SLK and B Class will also be given facelifts.

What is your most popular model?

The C Class in terms of its range, because there are many different models. It is the core product for Mercedes and was re-launched last year. A quarter of our total sales, though, are S Class cars, which reflects the profile of the region. It’s the top-of-the-luxury range with an entry price of Dh345,000, but it reflects the profile of customers and wealth in this region. We are the third or fourth biggest market pro rata for S Class in the world.

You currently have nine showrooms – are there plans for more?

We have challenges with HR and facilities but we’re building a new workshop in Sharjah, which will give us 50 more bays to cope with demand. We’ve also got a new used car showroom that’s within weeks of being open in Al Aweer. We’ll invest more towards the south of Sheikh Zayed Road and Jebel Ali.

Is that because of all the housing districts springing up in that area?

Everyone knows the congestion issues in Dubai and clearly communities are being built in that area. So asking our customers to come to Deira for servicing is probably asking a bit too much.

Porsche has recently unveiled plans to build a hybrid car. Does Mercedes have any such plans?

On a global scale, environmental issues are big in Europe and becoming more of an issue in the United States and more so from a fashion perspective than anything else. Fuel is also coming close to $1 a gallon so all manufacturers are following it closely, but we don’t have plans to introduce hybrid or electric vehicles in the UAE in the near future.

Do you think hybrids could take off here?

I’m not sure I could predict that, but I have confidence that at some stage the green issue is going to be tabled in this part of the world. When you talk about environmental issues you have to segment people’s motivations. You have some very focused environmentalists who probably don’t have a car, and a group who have a conscious about the environment but have a financial aspect to it, too. Motorists are also influenced by the cost of fuel, but in this part of the world there’s no real incentive for people to change their driving habits from a financial basis so it’s unlikely the extent of change will be massive.

Finally, what car do you drive and why?

I love the S Class because I think it’s the best luxury car on the road today and that’s not just because I work for the company. The S Class offers a lot of things – incredible comfort, space, performance if that’s what you require. If you drive long distances you can come out of that car after you’ve driven for hours and you’ll never know.