By Mohammed A. R. Galadari
3 October 2004
DEAR readers, the news that Volkswagen, the German automobile giant, is planning to shift some of its manufacturing units to Abu Dhabi, is an inspiring one for us. We know that the emirate is pushing its car manufacturing agenda with great zeal, as part of a vision for industrialisation.
Obviously, the President, His Highness Shaikh Zayed bin Sultan al Nahyan, and his team is doing their best in this direction. While the news relating to Europe's largest carmaker was in the air for some time, the visit by a Volkswagen team to the capital showed the project is taking a concrete shape.
Among the plans are to take up nine new joint ventures at an estimated cost of upto $5 billion, involving the setting up of new units in the Automobiles Manufacturing Free Zone being planned in the emirate. There are plans for the manufacture of vehicle components as well as assembly of vehicles. Considering the circumstances, I am sure this move on the part of Abu Dhabi is well conceived.
The idea of Volkswagen to come to Abu Dhabi is aimed at cutting down its costs and to make their products more endearing to this region, where car sales are high. We are blessed with two things: one, we have a workforce and energy that are relatively cheap, that will make the project more viable; two, Abu Dhabi has class and acceptability, as it is part of the developed world. The product that comes out from Abu Dhabi will be seen as a quality product, whereas, the same product manufactured in an underdeveloped country may not have as much acceptability.
As you know, dear readers, some cars that we get here from Japanese manufacturers are not coming in from Japan, but from their production units in Australia. But nobody tries to undermine its worth, because we all know Australia is high in quality consciousness. So is with Abu Dhabi. The product that comes out of Abu Dhabi will be trusted for quality. The benefits of this arrangement are both for the manufacturers and customers. Costumers will get the same brand of the European car with less price; and the company will still make better profits.
The Middle East is one of the best markets for cars. Almost every family has a car or more in GCC countries-it means almost half a million cars are sold a year. With Iraq opening up, the market is bound to widen. And cars manufactured in the UAE can find a ready market in India, Pakistan, and the African countries. Who knows, it might even be exported to Europe. And, note also the fact that the region does not have any similar major venture yet.
So, I believe, Abu Dhabi has taken a visionary decision with proper planning for the future. Once the project is through, it will benefit the people in many ways. More jobs will come their way and more money will flow. As of now, UAE nationals are only 30 per cent of the population. That scenario will change over the years. The percentage of local population will go up. For them, more industries mean more jobs and more benefits.
That's what Abu Dhabi is doing, rather than be satisfied with its high living standards and oil wealth -it is the largest economy in the UAE and possesses 90 percent of the hydrocarbon resources of the country. But it doesn't want to rest on its laurels. The more it pushes, the more it grows, and the more the people benefit.
Source: Khaleej Times