Bloomberg News

Emirates’ Rainbow Sheikh Exemplifies Record Rolls’ Sales: Cars

July 05, 2011

July 6 (Bloomberg) -- Sheikh Hamad Bin Hamdan Al Nahyan, a member of Abu Dhabi’s ruling family, is one of the reasons why the Persian Gulf region has become a hot market for luxury cars, even as political turmoil grips other parts of the Middle East.

Sheikh Hamad, known as the Rainbow Sheikh for his penchant for bright colors, exemplifies the region’s automotive excess. His collection of more than 200 vehicles, which includes a five- meter (16 feet) high replica of a Dodge Power Wagon and a see- through disco car, is housed in a pyramid-shaped museum.

With demand stoked by profits from oil prices near $100 a barrel, wealthy Arabs are set to buy a record number of vehicles from the likes of BMW’s Rolls-Royce, Fiat SpA’s Maserati and Porsche SE this year. Sales of high-end cars in Gulf countries, including the United Arab Emirates will probably grow 20 percent this year, more than double the overall rate of 9.7 percent in the segment, according to data from IHS Automotive.

Buying luxury cars in the Gulf is “an extension of the ego,” said Pierluigi Bellini, associate director of Middle East research at IHS Automotive in Milan. Wealthy consumers like “showing off” more than Europeans and Americans, he said.

The sales spurt will probably continue, with IHS forecasting the market will more than double from 2010 to 2015, compared with a 51 percent increase globally.

The upbeat outlook for much of the Gulf contrasts with other areas of the Arab world, where uprisings have overthrown governments in Egypt and Tunisia and sparked a civil war in Libya and riots in Syria, Bahrain and Yemen.

Waiting Lists

“Thanks to the U.A.E., we were able to counterbalance the slowdown in other parts of the region,” said Umberto Maria Cini, who oversees the Middle East and Africa for Maserati. If the sales pickup from May and April continues, the Fiat unit may “run out of cars” in the next few months, Cini said, predicting a gain of more than 10 percent for the rest of 2011.

Porsche is asking U.A.E. buyers of the Cayenne SUV to wait at least three months to get delivery, while a 911 sportscar may take as long as seven months to arrive, George Wills, acting managing director for the region said in an e-mail. He predicted growth of at least 10 percent in the second quarter.

Rolls-Royce’s sales through May surged 74 percent in the Middle East and Africa, with the U.A.E. the largest market. BMW- brand deliveries jumped 42 percent in Abu Dhabi in the first quarter and 38 percent in Dubai, powered by high-end models like 5- and 7-Series sedans and X5 and X6 sport-utility vehicles, said Reiner Braun, BMW’s regional sales chief.

‘Luxury Bias’

“High oil prices generally translate -- with a lag -- into second-round wealth effects,” said Philippe Dauba-Pantanacce, senior economist at Standard Chartered Bank in Dubai. “In this case, there is a marked bias toward luxury consumption.”

In addition to the growth, the mark-up on customized and special-edition vehicles is attracting investment from ultra- luxury nameplates. Bayerische Motoren Werke AG’s Rolls-Royce has its biggest showroom in the world in Abu Dhabi. An indoor Ferrari theme park, big enough to fit seven football fields end to end, opened there last year.

Maserati plans a showroom in Iran, where it once served Shah Reza Pahlavi, by early next year. Cini predicted that the country will become the brand’s second-largest in the region after the U.A.E.

“In the Middle East, we see richer versions and customizations, which makes it a better market for margins for luxury-car makers,” said IHS’s Bellini. “It’s a region that traditionally likes luxury cars, making it a good bet.”

Desert Colors

An inclination toward extravagance spurred the development of models like the Bugatti L’Or Blanc, which is equipped with porcelain accents from Berlin-based KPM, a 248-year-old company that supplied King Frederick the Great of Prussia. The 1.65 million-euro ($2.4 million) special edition of the Veyron Grand Sport, which features a caviar tray in the center console, was created by Volkswagen AG’s supercar brand for an unidentified Abu Dhabi businessman.

Then there’s the Rolls-Royce Phantom Coupe Baynunah with a price tag of 2.05 million dirhams ($558,142). The model features a leather rooftop and a color-combination inspired by the desert. That followed the Yas Eagle, the first Rolls Royce with a matte exterior color for 1.95 million dirhams.

Maserati introduced the limited edition GranTurismo S MC Sport Line for the Middle East in 2009, after selling half the global allotment of the 685,000-dirham Quattroporte Collezione Cento in the region.

Diamond-Studded Verse

The region’s wealthy aren’t satisfied with owning a limited edition of one of the world’s most elite cars. Many want something even more exclusive.

“There’s more customization here than other parts of the world,” James Crichton, Rolls-Royce’s director for the Middle East and Africa, said in a phone interview. “Middle Eastern customers want to create something individual that’s unique to them. Other buyers are more standard and less adventurous.”

To grant the wish of an Abu Dhabi buyer, Rolls-Royce crafted a poetry verse out of diamonds, gold, and leather for the interior of a $450,000 Phantom extended wheelbase model. The Goodwood, England-based carmaker also created a color called “Astro Silver Matte” for the exterior of another Gulf Phantom. Such wishes aren’t free. The paint job cost $23,000, according to Rolls-Royce’s Crichton.

While sales volumes are relatively small, representing just 1.7 percent of global luxury-car deliveries last year, buyers like Sheikh Hamad, who has a Mercedes in every color of the rainbow, make it a lucrative market. Sheikh Hamad wasn’t available for comment.

“Our top customers here change their cars every year,” said Kadhim Alhelli, Rolls-Royce brand manager at Abu Dhabi Motors. “Some even more often.”

--Editors: Chris Reiter, Christopher Jasper

To contact the reporter on this story: Tamara Walid in Dubai at

To contact the editor responsible for this story: Benedikt Kammel at

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