“The auto market for new cars is struggling these days. Did the recession affect your business?” |
| The auto market for new cars is struggling these days. Did the recession affect your business? Posted: 24 Oct 2010 12:18 PM PDT DUBAI — Gapcorp Holdings, a UAE-based company, will start its operations in Saudi Arabia next month and plans to offer special insurance products to motorists in the kingdom, its top official said. "Auto industry has grown in the GCC and we believe that 2011 will have an explosion in market growth in Saudi Arabia and stable growth in the balance of the GCC markets," Nasser Watar, Chief Executive Officer and Chairman of Gapcorp Holdings, told Khaleej Times in an interview. Gapcorp is a leading sales, marketing and third party administrator operating in the GCC, Middle East, North Africa, Asia, Europe and the USA. The company is recognised for servicing well-known Automotive Dealerships in and around the region with its extended warranty schemes and innovative expertise. It also sells and develops a complete range of extended warranty programmes and insurance services for the millennium customer. Excerpts from the interview: Actually, there is growth in the GCC market especially Saudi Arabia and the UAE as both markets have shown a 10 per cent year-on-year growth, which reflects that the market is stabilising and the credit facilities are being relaxed too. The shift in the increase of number of years in ownership versus previous years in the last two years have pushed automotive companies to look for an added value product that will benefit the consumer and at the same time retain them for future purchases, accordingly our business has expanded and since we are one of the most known companies in the region, I can say that the business expanded. With the global financial crises, insurance in general in the UAE was stable towards the end of the year, though there is a serious appetite for premium and that squeezes profitability as this could lead in insurance companies looking for increased premium but not quality insurance risk. What is the size of insurance industry in the UAE? How much share does the auto industry have in the auto insurance segment? UAE insurance companies' gross premiums reached more than Dh9.9 billion in 2009 against Dh9.4 billion in the previous year, an increase of five per cent, according to a study by Standard and Poor's ratings agency. Abu Dhabi-based companies collected 38 per cent of the total premiums, Dubai 47 per cent and other emirates 15 per cent in 2009. The international ratings agency said the proportions are similar to 2008. Engineering and construction premiums declined in response to both project completion and abandonment. Also, marine cargo risk covers have declined as shipments reduced because of the global economy contracting. The motor insurance has also faced the same phenomenon since most of the banks were reluctant in their car loan offers. The motor-insurance portfolio constitutes 30 per cent of the general insurance premiums. However, most of the clients prefer a comprehensive cover rather than third party liability in order to be better protected in case of an accident. Since both covers (comprehensive and TPL) fall under the motor insurance class, a precise breakdown could not be reachable. What is the share of Gapcorp in tge GCC's auto insurance market? What steps are you taking to boost its market share in the UAE? We cannot compare such a product in relationship to insurance products as our offering is a down-stream service and not regular motor insurance products. The used-cars segment still an untapped sector as people skip insurance cover on old vehicles due to high premium? Does Gapcorp has any plan to attract used car owners for insurance? Gapcorp would put programmes for used cars only in the presence of a new car programme. This depends on the customer requirement. The extended warranty is a product that can be customised to fit the consumer requirement. Gapcorp grew by more than 30 per cent year-on-year and have gained additional blue-chip automotive companies which add to its comprehensive list of clients. As mentioned earlier, the auto industry has grown in the GCC and we believe that 2011 will have an explosion in market growth in Saudi Arabia and stable growth in the balance of the GCC markets. Within 30 days. Gapcorp are working on additional products that can be offered in the KSA market and will have such products soon. Gapcorp has signed with VW Group to implement an extended warranty programme in all Middle East and North Africa region. This entry passed through the Full-Text RSS service — if this is your content and you're reading it on someone else's site, please read our FAQ page at fivefilters.org/content-only/faq.php |
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