Japanese carmaker Nissan already has the lion's share of the market in the region, but newly appointed managing director for the Middle East, Thierry Sabbagh is keen to see even more of their cars on the roads
On long journeys as a child, my brother and I would play a game of ‘spot the car’. It was a simple game that quickly ate up the miles until we reached our destination, where we would each pick the make of a car and earn points for every one we spotted en route.
A fair competition, the honours were regularly shared between the two of us.
Had we been living in the Middle East, however, it may have been a different story altogether.
That’s because if Nissan is your car of choice, more than likely, the game is yours.
Its popularity was cemented recently when Nissan Middle East declared that it had increased its market share in the Gulf region to 16.9 percent.
Announcing its 2018 business results for the Middle East, the company revealed its market share in the Gulf – UAE, Oman, Bahrain, Kuwait and Qatar (Saudi Arabia is run by a separate entity) – reached a record high, with sales up by 1 percent from 2017 to 2018, despite an overall decline in the industry of 7 percent over that period.
Sadly ‘spot the car’ would be a little fairer in the wider Gulf, which includes Lebanon, Jordan and Iraq, where the market share stands at a marginally lower 15.7 percent.
In terms of the UAE, the company’s ‘core market’, the industry declined by 8 percent from 2017 to 2018. However, sales of Nissan increased by 2 percent from 49,700 to reach 50,300 units, increasing the market share in the country to 20.1 percent, rendering ‘spot the car’ a one-sided procession and, as good as redundant.
Recognising the dynamic nature of the industry, Nissan remains committed to bringing innovation and excitement to all our customers in the Middle East
The Nissan Sunny saw a 58 percent growth to 23,092 in 2018, resulting in a 52.1 market growth in the Gulf. The Nissan Kicks saw its market share rise to 32.4 percent.
In the UAE, the Nissan Patrol range is the country’s favourite SUV with its market share increasing to 45.2 percent, while the Nissan Patrol Safari recorded a 28.4 percent increase in sales.
“Recognising the dynamic nature of the industry, Nissan remains committed to bringing innovation and excitement to all our customers in the Middle East. Our strong growth in FY18 is a testament to this commitment. Over the past year, we have maintained operational excellence across our product line-up, while finding new ways to connect and engage with our customers, which has led to our record-breaking market share,” says Thierry Sabbagh, recently appointed managing director of Nissan Middle East.
A record-breaking year it may have been for the Middle East, but it has been something of a turbulent 12 months for the company in general. Former CEO Carlos Ghosn and his right hand man Greg Kelly, who both deny wrongdoing, were arrested in Tokyo in November last year, accused of financial misconduct, including under-reporting Ghosn’s salary.
Ghosn oversaw the alliance of Renault, Nissan and Mitsubishi Motors, creating the world’s top-selling auto company.
Following his arrest, he was subsequently ‘discharged’ as Nissan chairman, while four days later he was also fired as boss of Mitsubishi.
Further charges were added including aggravated breach of trust, alleging Ghosn siphoned off money for personal ends from cash transferred from Nissan to a dealership in Oman, while last month, Renault in France revealed that an internal audit identified €11m ($12.25m) of questionable expenses at the Dutch subsidiary, RNBV, which is jointly owned by Nissan. This included “certain spending by Ghosn” and overcharging for his plane travel.
With specific regard to operations in the Middle East, Sabbagh says: “We have a very robust way of doing business in the market, very strong processes. We are very proud of being in every way we do business, very ethical, and this is what is really important for us.”
We believe with our midterm plan actions, with our strategy, we will definitely get to 20 percent market share and more, and this is the ambition we have
Nissan Middle East currently has 11 independent distributors, 39 sales outlets and 61 after sales.
Sabbagh says the company’s midterm plan is to reach 20 percent market share in the Gulf, and 15 percent in Saudi Arabia.
This may seem ambitious given the outlook for global auto manufacturing remains negative on declining light vehicle sales in the next 12 to 18 months.
According to Moody’s, global light vehicle sales are expected to fall 3.8 percent in 2019 and 0.9 percent in 2020, with weak demand in China and Western Europe.
In a recent report, Moody’s Investors Service said sales of light vehicles are set to keep falling amid geopolitical angers, including the US-China trade conflict and Brexit.
But Sabbagh says he’s seen plenty to assure him of a positive uptick from the local market.
“The industry has been declining and declined last year. We are very confident that the market has stabilised; we have seen some good signs of recovery in Saudi Arabia over the last few months and we believe that will have a positive impact on the rest of the region as we go forward,” he says.
“We have a very robust presence, a very robust market share and very strong business partners, so we want to take these relationships and presence in the market to an excellent level with our customers.
We are busy making sure that the infrastructure of the market is ready. We want to make sure we launch it in the most flawless way
“We believe with our midterm plan actions, with our strategy, we will definitely get to 20 percent market share and more, and this is the ambition that we have.”
Sabbagh, who was appointed to the role of managing director towards the end of May, also reveals growth plans for Kuwait and Bahrain. Kuwait, in particular, saw retail sales in 2018 go up by 50 percent and the market share climb to 11.1 percent. “Today the opportunity is to unlock even further the opportunities and the potential in markets like Kuwait and Bahrain,” he says.
However, the opportunities Sabbagh refers to does not include the introduction of its electric vehicles in the region – spotting a Nissan Leaf while driving down Sheikh Zayed Road is impossible – for the time being at least.
The Nissan Leaf was unveiled for the first time in the Middle East at the Dubai International Motor Show in November 2017 and went on to become the biggest selling electric vehicle in the world, with over 350,000 sold last year.
In an interview with Arabian Business in January 2018, Kalyana Sivagnanam, then Nissan regional vice president sales and marketing, Africa Middle East and India, revealed the company’s electric cars would be hitting the region’s showrooms by the third quarter of that year.
In a further interview, the company’s general manager Jurgen Schmitz hinted at a 2019 launch.
However, Sabbagh concedes that, while the appetite is still there to welcome the vehicles to the Gulf, there is currently no specific launch date.
I will not give you a time, but I can assure you we will be a strong contender in the electrical category in this market
He says: “We are definitely very excited that we will be bringing this product to the market. We are busy making sure that the infrastructure of the market is ready. We want to make sure we launch it in the most flawless way.”
The second-generation Nissan Leaf has a potential range of 400km (250 miles) between charges, compared with 250km for its previous version.
Nissan signed an agreement with Expo 2020 in 2017 to be the official automotive partner for the event.
The deal will see the Japanese firm provide the Expo 2020 fleet, including electric vehicles and next generation cars featuring advanced technologies.
The Expo 2020 fleet will total around 1,000 Nissan vehicles to support both the preparations for and delivery of the event. The vehicles will range from sedans and SUVs to pick-up trucks and buses. They will be used for a variety of purposes, including construction, VIP visits and transport for participants and organisers.
Nissan will also provide support for the fleet, such as maintenance, roadside assistance, insurance and Expo 2020 fleet branding. Sabbagh says: “I will not give you a time, but I can assure you we will be a strong contender in the electrical category in this market.”
Hopefully, it won’t be too long before the Nissan Leaf joins the game and will be the one to spot on the region’s roads.
The UAE automotive industry faced another difficult year in 2018. According to industry specialists, the trend is likely to continue through 2019 and, even if there’s growth of 2 percent, it would make for a decent year for them. This is due to various factors, such as overstocking of cars by dealers, and abundant availability of certified pre-owned vehicles.
That said, the UAE will continue to be one of the most robust automotive markets in the GCC thanks to factors such as low fuel costs, low import tariffs, high per capita disposable incomes, and a favourable tax regime. Also, attractive insurance and finance options make it relatively easier for consumers to buy cars in the UAE. The outlook is particularly favourable for the sale of luxury cars, electric and hybrid vehicles, and motorcycles. (Information courtesy of export.gov)
Approximately 80 percent of the UAE automotive market is passenger cars and the remaining 20 percent is commercial vehicles (trucks, vans and buses). In 2018, Japanese manufacturers Toyota, Nissan and Mitsubishi remained the leading sellers of passenger cars in the UAE. Toyota retained its position as the market leader with 29.9 percent share, followed by Nissan at 23.7 percent, and Mitsubishi at 13 percent. The top three brands comprised around 66.6 percent of total passenger car sales in the UAE in 2018.
Among the top ten brands, the only other brand that gained sales in 2018 was Land Rover (28.5 percent). (Information courtesy of export.gov)