ABU DHABI, United Arab Emirates -- With oil near record highs, the Persian Gulf is awash in cash, stimulating a return to some very conspicuous consumption.
Ferrari S.p.A. says sales in the Middle East leapt 32% last year. BMW Group's Rolls-Royce Motor Cars says the UAE, a country with a population of just 4.6 million, is now one of its top five global markets. All those expensive cars clogging the roads have given rise to another must-have status symbol: a prestigious license-plate number"Everyone has a nice watch, a nice car," says Abdullah Al-Mannaei, organizer of the city government's monthly auction of desirable numbers. "It's not enough to just have a Ferrari anymore."
Hundreds of men in starched robes descend on an opulent hotel here to vie for the most distinguished digits. Earlier this year, Abu Dhabi businessman Saeed Khouri made headlines and the Guinness Book of World Records when he paid $14 million for the tag simply sporting a "1." His cousin, stockbroker Talal Khouri, paid $9 million for "5" -- the second-largest sum ever paid for a license plate.
Hundreds of men in starched robes descend on an opulent hotel here to vie for the most distinguished digits. Earlier this year, Abu Dhabi businessman Saeed Khouri made headlines and the Guinness Book of World Records when he paid $14 million for the tag simply sporting a "1." His cousin, stockbroker Talal Khouri, paid $9 million for "5" -- the second-largest sum ever paid for a license plate.
Abu Dhabi is hardly the first boomtown to be swept up in luxury license plates. Hong Kong has had a thriving auction for years, while high-rolling Russian executives have gone to great lengths to secure custom tags.
While Emiratis have informally traded license plates for years, auctions are a new phenomenon for the UAE, which last year boasted 79,000 people with net assets above $1 million, excluding their primary residence, according to the Capgemini/Merrill Lynch world wealth report. That's up 14% from the year prior. Like Abu Dhabi, the neighboring state of Dubai started its own auction a year ago. Bahrain is planning to start one later this summer. Mr. Al-Mannaei, organizer of the Abu Dhabi auction, is negotiating for another with officials in Egypt -- which may not have much oil itself, but is riding a regionwide investment boom.
Abu Dhabi is the undisputed capital of the craze. Although the place is sleepier and more conservative than glitzy Dubai, 75 miles away, Abu Dhabi's small business community is far wealthier, thanks to the city's status as one of the world's largest oil producers. Plus, as the nation's capital, Abu Dhabi has first dibs on the choicest license-plate digits.
Luxury Numbers
Each month, Mr. Al-Mannaei and the Abu Dhabi Ministry of the Interior select approximately 100 plates to go under the hammer, picking combinations they reckon will fetch the best prices. The predominantly Muslim society doesn't revere lucky numbers as the Chinese do. But low numbers are always popular, as are combinations of digits that might convey prestige -- such as numbers that are the same as luxury car models. (The government issues more-pedestrian tags -- with five random digits -- for a $95 registration fee.)
Controlling Supply
Soft-spoken and modestly dressed, 34-year-old Mr. Al-Mannaei says he closely controls supply, releasing low-digit plates "almost scientifically." The result, he says, is a frenzy for even mediocre numbers. In the last two auctions, three-digit plates fetched between $123,000 and $150,000 each, more than double the prices last fall. In the 10 auctions held so far, buyers spent roughly $120 million for 900 plates; the government plans to use the money to build a new trauma hospital for traffic-accident victims.
Mr. Al-Mannaei, who declines to provide his remuneration, spices things up from time to time with plates that match popular luxury-car series. The brother of Talal Khouri, the stockbroker who shelled out $9 million for "5," paid just over $120,000 to furnish his red Ferrari F430 with a "430" plate. (The car itself lists for approximately $180,000.)
Indeed, the extended Khouri clan, which earned its fortune from the stock market and land development, is one of the license-plate market's biggest players. Talal, 35, displays his "5" plate on his cabernet-colored Rolls. He's also bought "55" and "55555," among others.
The "1" tag bought by Saeed, 25, was a coup for the family, says his 21-year-old younger brother Hamdan. "We are lucky. We have the money to get what we want. We want to be the best," Hamdan says. For his own car, a Land Rover, Hamdan is eyeing "494," the number included in his Hotmail user name. Although Hamdan has an order in for a Ferrari F149, set to hit the market next year, a cousin has already snapped up plate "149."
Saeed and Talal, the two highest-spending Khouris, declined to be interviewed. "They don't like to be the center of attention," says Hamdan.
Gold-Rimmed Cups
Some of the city's conservative burghers frown on the spending, but Abu Dhabi's monthly auctions are now a favorite male haunt. The high-stakes show usually fills the 1,000-seat gilded theater inside the Emirates Palace, an extravagant 64,500-square-foot hotel stretching almost one mile along the sea. Tea and coffee come served in gold-rimmed cups and saucers.
"It's the best place to be. I never miss one," says Nasser Khalifa Al-Budoor, a civil servant at the health department. He says he's a man of modest means but says he forked over about $30,000 a piece for two five-digit plates at auctions last year.
Classic cars adorn the stage. Disco lights and a blaring hip-hop soundtrack drown the chatter of eager bidders as they take their seats inside the theater.
The mood turns serious when the lights dim. At last month's event, auctioneer Mohammed Al-Yousef, a man with a delicate-shaped face and long, tapered fingers, glided onto the stage to the theme music from the movie "Chariots of Fire."
Hot Ticket
The hot ticket of the day was "9," the only single-digit plate up for grabs. Bids started at $700,000, but within minutes the price had topped $2 million. As the weak-hearted dropped out, two men in Arab headdress dueled amid the cheers of supporters who had congregated across two aisles.
Bidding jumped in increments of 500,000 dirhams -- about $136,000 -- until it reached 15 million dirham, or about $4 million. A sweaty-faced agent acting for an anonymous Abu Dhabi industrialist spoke heatedly into his cellphone, seeking permission to extend his limit. His boss had been trying to purchase a single-digit for the last three auctions, he said.
"He told me do what it takes...to take this one home," said the agent. He eventually won, for $4.2 million.
Ahmad Al-Ketbi arrived at the auction hoping to buy "29." The plate would match an older series tag -- in a different color -- that his father already owns.
"I gotta have a plate," he said. Never mind that the baby-faced 15-year-old is three years away from the legal driving age.
Amid ferocious bidding with men twice his age, Mr. Al-Ketbi, who sat with his younger brother in the theater, thrust his bidding flag up again and again until he won. His bid: $530,000.
