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Sep 10 2012

Al Habtoor Group unit eyes $1b in sales

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Al Habtoor Group

Al Habtoor Group unit eyes $1b in sales

Monday, Sep 10, 2012

Dubai: An UAE company is venturing into branded auto parts, which has historically been dominated by automotive majors and independent global vendors such as ACDelco.

Al Habtoor Group is creating the brand - GAP - under the umbrella of a newly formed company, Global Auto Parts. It has an eye on the booming spare parts trade that takes place out of Dubai, which according to government sources is valued at more than $10 billion annually. Growth rates in the trade have consistently been in the high double-digits.

Global Auto Parts expects to attain sales of $1 billion (Dh3.67 billion) within five years, selling the branded merchandise, according to a top official. To this end, it is building a retail network of its own — in Dubai and Sharjah to begin with — as well as through third-party parts vendors in the UAE and beyond.

“There is a vast untapped market of vehicle owners who have moved beyond the three-year warranty periods most dealerships provide,” said Karl Hamer, managing director at Al Habtoor Motors. “They want access to a large inventory of spare parts that are not as expensive as the branded ones; this is where Global Auto Parts can come in and offer products that can be used by any automotive brand.”

The Al Habtoor Group entity will not be manufacturing the parts but has sourcing arrangements with a network of factories, the majority being from the Far East. The inventory works out to more than 16 million parts.

The global spare parts production was severely disrupted by the earthquake in Japan early last year and then the massive floods in Thailand — where several factories are located — in November of the same year. It did lead to disruptions in the parts trade in UAE. “Since then dealerships and parts vendors have assigned the highest priority in ensuring a smooth supply,” said an auto industry analyst. “This has meant creating buffer stocks and trying to expand their network of suppliers.”

According to Hamer, “We will maintain an optimum stock level that will assure our buyers immediate access to the stock they want. It will be something that will be looked at constantly.”

By Manoj Nair, Associate Editor

Gulf News 2012. All rights reserved.

© Copyright Zawya. All Rights Reserved.

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