By Andy Sambidge
Al Futtaim Automotive announces deal to customers amid job security fears.
Al-Futtaim Automotive, the UAE's largest car distributor, has announced it is offering a free redundancy cover to customers amid the impact of job losses in the country.
The deal will be valid on purchases from all their volume brands in an effort to restore confidence to those currently delaying a vehicle purchase due to job security concerns.
The group represents Toyota, Honda, Volvo, Chrysler, Jeep, Dodge as well as Automall, Al-Futtaim Automotive's pre-owned car division.
The redundancy cover, a first in the UAE, gives Al-Futtaim customers the reassurance of a payout of 15 percent of the invoice value of the vehicle in the event of them losing their job involuntarily.
The customer is free to use this payout as they wish. For example, if the vehicle was purchased on finance, the payout can be used to continue to make their monthly payments while they find new employment.
Len Hunt, group director, Automotive, Al-Futtaim, said: "Whilst our sales have grown during the first quarter of this year, our research has shown that there are a still a significant number of customers who want to take advantage of our current strong offers but are holding off purchasing due to concerns about their job security."
Al-Futtaim Automotive's brands have seen positive sales growth over the last couple of months, helped by the company's partnership with several leading banks that has led to finance underwriting criteria being relaxed considerably since the beginning of the year.
Under this partnership, Al-Futtaim Automotive now offers loans to those earning from AED3,000 per month, a return to situation before the change in economic climate.
"We are very positive about the future and we want our customers to share in this sentiment," added Hunt.For all the latest market news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.
This is a brilliant first step by the car industry in the UAE. It isn't generous, but it is proof that creative thinking and confidence in the future combine to offer a valid solution to current issues. There is survival written on this, but it is laudable that Al-Futtaim has seen a constructive and sustainable way forward. This appears to be a transparent offer, so let's see how many take it up.
"Whilst our sales have grown during the first quarter of this year" REALLY?? how can sales grow when we all know that most car dealers have stocks that can last for years to come. "We are very positive about the future and we want our customers to share in this sentiment," added Hunt Well I am positive too but stop milking your customers and bring the prices down to reasonable levels.
Whilst I applaud Al Futtaim for creating such an offer I still find it unreasonable for anyone to be purchasing until the economy picks up again. Why anyone would want to get into debt at this point in time boggles my mind...just pick up a nice little distress sale; there's plenty out there!
15% of a vehicle Invoice Value is least of worries for someone losing their Job in Dubai. As soon as you're out of an employment, there's a good chance your work permit / the necessary license to stay in Dubai as legal resident also goes with it. What are you going to do with a Car on finance, where you can't complete the terms and even find another buyer who'll be ready to buy it. Leaving the car EMI out of the equation, there are other expenses and quite large ones (rent + DEWA + Etisalat) that makes it difficult for someone without a job to continue here for long. Considering all that, even though this scheme seems like a nice way to get customer attention and offers them some re-assurance, I suspect it'll not make them change their decision of not purchasing a car in current conditions. From a selfish point of view, in the worst case scenario, the car dealer loses 15% of the Invoice value, even after which they should still make some profit 'cause it's financed by the bank. Where as the customer even though makes that 15%, unless they can find another Job or another buyer for that car already on finance, they're meant to loose quite a good amount.
Hmmm, we have a saying in Malayalam language... "Kalakka Vellathil Meen Pidikkuga", that means fishing in the muddy water.... Now Al Futtaim doing just the same. I don't think it will work. They need to do a little more harder plans go with the situation...
one of my colleague from our company have applied for loan for purchasing a vehicle from Toyota. His monthly salary is AED 6250/-. Even then no bank was ready tp provide him loan for the vehicle and people from toyota did not cooperate as they had number of reasons was rejecting the loan. All claims by al futtain (toyota brand) are baseless.
Maybe this is a smart strategy to prevent people leaving their car at the airports! If the person who lost his job contacts the dealer, the chances of getting the payout is debatable however the dealer has a good chance of preventing the guy from leaving the country! Its like taking the bait - hook,line and sinker
To Al Futtaim Are you crazy? Offering loans to sub-prime borrowers was what started all this nonsense in the first place. Have you learned nothing? If a buyer gets the push from work, they will either leg it and not pay you; get chucked out and not pay you; or go to the slammer and not pay you. Three ways to win there, huh?
PT Barnum was right. There IS a fool born every minute, or at least Al Futtaim must think so! Let me identify all the crazy problems with this idea: 1. I think I might lose my job 'cause the economy is bad. But wait, Al Futtaim has offered me this GREAT deal. If I lose my job they will give me 15% of the invoice value of the car so I "have peace of mind". What happened to them now knowing that I have lost my job and putting a travel ban on me (great way to trap me in the country, don'tcha think?) 2. I think I might lose my job 'cause the economy is bad. But wait, Al Futtaim has offered me this GREAT deal. They are going to finance a car for me. But wait, what does Al Futtaim think got the economy into this mess in the first place? I have a suggestion, just live within your means, don't buy a new car 'cause you probably don't really need it, and SAVE some money. Then you won't have to worry about this measly 15% Al Futtaim is offering you. For what it's worth... SJ
I purchased a car from citi bank loan. I changed the job from Dubai to Abu Dhabi. When approached to transfer the car to Abu dhabi, Citi Bank refused to give NOC to transfer the car to Abu Dhabi stating that I need a letter from the Abu Dhabi Police deptt that they should inform citibank if I abandon the car in AUH. They said had I taken the car from AUH to Dubai,there was no problem but reverse was the problem! Finding no way , I paid the entire balance loan amount to bank,they gave NOC after three days od continuous follow up and visiting daily to citi bank Bur dubai branch!!!!!!