New Dh7.9m super luxury car in UAE... who pays Dh395k VAT?
dubai — Competition in the super luxury car segment in the UAE and GCC is set to heat up with a new European brand driving into the market to challenge existing players.
Dubai-headquartered Deals on Wheels has been appointed the distributor by Milan Automotive, manufacturer of one of the world’s fastest super car Milan Red, which comes with a top speed of 467km per hour.
According to Mohamed Redha Abdulla, owner and CEO of Deals on Wheels, the luxury car industry is currently going through a very difficult patch but his company is targeting the super high net worth clientele who have not been affected by the slowdown in the global economy.
“This brand is targeted at the crème de la crème... and are very passionate about the car collection. They would love to have the Milan Red in their collection,” he said.
He attributed the slowdown in the luxury car segment to the overall gloomy situation of the global economy, as well the geopolitical situation in parts of the region and low oil prices. This week, Deals on Wheels launched the Milan Red, costing €1.8 million (Dh7.9 million) in retail. But who will pay value-added tax on the car, which will amount to Dh395,000: the retailer or buyer?
“We will be selling it inclusive of VAT. We are also absorbing VAT within our sales price. VAT has definitely affected the cars sales as new taxation takes time to get into the system as there were some concerns in 2018. So hopefully everything will be okay in 2019,” said Abdulla.
Milan Automotive will produce only 99 units of the Milan Red. Abdulla hopes to sell around 15 to 20 units of the super luxury car to its GCC clientele, which includes ultra-high net worth individuals and members of royal families.
“Our sales are a balanced mixture in the GCC, and we are hoping to sell three to four units in each country. We have a network of high net worth clientele in Saudi Arabia, Kuwait, Bahrain, Oman and the UAE. We deal with the members of the ruling families also in Dubai, Saudi Arabia and Oman,” he said.
Abdulla revealed that the clients buying normal sports cars between half-a-million to Dh1 million range change their cars quite often. But in the super car category, buyers are mostly collectors and high net worth people who don’t sell it but like to keep and drive the car.