Sale of imported brand new cars especially from Japanese origin has shown a significant growth rate in the past few years in the Middle East. This is mainly due to the increased number of expatriates from Asian region. The annual growth rate of the industry shows more than 12 % for the past five years and expected to maintain the same level for next five years. DAS group of companies has a very little market share of the industry and now has decided to expand the business to capture significant rate of annual growth of market share.
DAS group of companies commenced business in 2002 in Dubai having obtained license for the import and sale of brand new cars from Europe and Japan. The head office and main show room with a floor area of 2000m2 is in Deira, warehouse, and workshop in Al Awir with an area of 5000 m2. Both premises are leased for a period of 10 years with annual renewals. At Al Awir warehouse and service center DAS group carries out the servicing of the sold vehicles and maintain a stock of ordered and other vehicles. The current capacity of the warehouse is 200 vehicles and 12 services per day. The head office in Deira houses a staff of 60 officers and 20 vehicles in show room. DAS group has an average sale of 100 vehicles per month and the requirement for servicing is 500 vehicles per month.
The current capacity and the resources available are insufficient for the current operations and expected future growth. The lease of the land and building is increasing to a very high level annually due to the Dubai market and significant amount of sales has to be spending as overheads. Customer’s orders have to be delayed due to insufficient warehouse space and the delivery period of the vehicle is more than expected. Customer has to wait for two weeks for servicing after inquiry as the capacity of workshop very much less than the demand. Both of the above factors lead for customer dissatisfaction and there will be a tendency of...