ROAD AHEAD: Mohamed El Talkhawi, General Sales and Marketing Manager, Audi Qatar, speaks about the future of leasing in the region.
By Marione Borela Lineses
Nestled along Salwa Road, the showroom spans an area of 3,100sq m that houses 30 Audi cars in various configurations. The venue sports elegantly unique design to indulge different tastes, exude prestige and represent Audi’s identity through their black-and-white palettes.
Mohamed El Talkhawi, General Sales and Marketing Manager, Audi Qatar, talks about the introduction of leasing in the country, as well as the new Audi R8 V10 Plus. Excerpts.
Tell us about the concept of leasing in Qatar?
The main goal of this concept is to give everyone a chance to drive an Audi car. We have moved away from the usual methods like buying a car with full payment or through bank loan. Leasing lets you drive the latest car with almost no cost upfront, rather than shelling off a down payment when you buy. This is in addition to the customer driving a fully insured new car for two to three years.
What are its benefits?
At the end of the contract, customers can choose if they want to pay the remaining and buy the car, buy a new Audi car with the same terms as the first contract, or to give up the car. There is no need to lease for longer period, which makes it easier for customers to change in case they face a problem. And customers are benefited with full warranty, full maintenance, and full service.
What is the common notion in the GCC about leasing?
The thinking is that an individual needs to pay monthly for the leasing term and will eventually give the car back at the end of the term and still have nothing owned that has any value.
That belief is true, but the financial analysis is totally wrong. Leasing allows you to drive brand new cars with almost no cost upfront, almost close to zero. In addition, the monthly payment for the car will cover the depreciation value over the term of the driving.
Can you cite an example?
Say a car is worth QR 100,000 which depreciates 25% of its value in the first year, then followed by an additional 10-15% through the course of time yearly. In the first three years the car would lose close to 50% of its market value. Therefore the buyer will lose QR50,000 of the original car value; provided that the vehicle has not been exposed to any incident and modification, which loses its value more. Leasing says, you don’t need to pay me the QR100,000 you can pay me the QR50,000 depreciation cost plus interest over the three years which everyone pays either way.”
Is leasing for everyone?
It is not for all but it is still available to all. It suits business owners, corporate sales and individuals who like to change their cars every 2-3 years, or prefer short term contracts.
How did residents receive this concept?
Both citizens and residents have become interested in the idea of leasing after we gave them a clear briefing on the concept.
What’s the background of leasing in the international market and how is it different in the GCC?
In the USA it was introduced over 50 years ago; but did well only in the past decade. Therefore, I’m not really surprised when I see the GCC resisting the concept. Today, leasing represents over 80% of the cars sold in the USA, which is the market that I have experience in for 20 years.
It’s been introduced in the Middle East, but without the back up of knowledge of proper presentation as a concept. Middle Eastern countries gear more towards the idea of ownership; and not mortgaging properties. The leasing concept is against what the culture is used to, and it will take time to implement.
What are the factors in consideration when car-leasing?
Choose a car as you normally would pay in financing, considering safety and options. But leasing lets you add options since you only pay a portion of the price. Say, you originally wanted a 4-cylinder car, you are now able to get a 6-cylinder one. You get a better equipped car for less money.
Choose the right car that accommodates your wants and select the proper term to accommodate your needs. The structure now is zero money upfront, in terms of the car, service, maintenance and insurance.
What makes this alternative method attractive than the usual?
The beauty of leasing lets you drive a new car, all the time, but if you prefer a car to own beyond the manufacturer’s warranty, you might consider financing because you’re not reducing your payments either way.
Are there leasing challenges that face buyers in Qatar?
There are limited resources when it comes to offering customers leasing options. Now, QNB is the only bank in Qatar that offers legal leasing contract. And Doha Bank offers a Buy Back programme, similar to leasing but with ownership experience. We offer leasing internally with our company.
How do you foresee this as a new concept in the GCC?
With time it will become apparent and better understood. I predict that it will grow magnificently in the region.
Finally, tell us about the new Audi R8 V10 Plus.
Audi is excited to reveal one of its exclusive Audi R8 V10 Plus in Qatar for the first time. The sports car is designed uniquely to introduce and accommodate a complete new standard in the market, offering an exceptionally edgy interior that compliments its sporty appearance. The Audi R8 V10 Plus is not just any sports car, but it is a mere reflection of Audi’s appreciation for creativity and imagination, combining both to come up with something new and original.
BELOW:
GLITTER: The Audi showroom at Salwa Road.
