Looking for opportunities: Middle East car market

Photo by Richard Allenby-Pratt, photographer

Jeep Grand Cherokee. Photo by Richard Allenby-Pratt

When it is about big SUV and trucks most of people think of American market. Certainly the US is known for being the place for large Ford, Rams, Sequoias and Tahoes. Their big roads and consumption have made these cars another product to be part of their lifes. But what most of people don’t know is that far away from there, in a really different culture, the big SUVs from Detroit and Japan find their world’s largest market share: the Middle East.

Thanks to great website bestsellingcarsblog.com, more information has been able about what it is called the Gulf Cooperation Council, composed by Saudi Arabia, United Arab Emirates, Bahrain, Kuwait, Oman and Qatar. And the numbers they gather together are not trivial. In 2011, more than 1.2 million cars, which represents a market larger than Australia’s and just behind South Korea’s or Canadian one. It is obvious that the good economic situation of these countries thanks to their big quantities of oil reserves, has translated to better economic conditions to some of their population. The strong and fast development can be seen in amazing cities as Dubai, Abu Dhabi or in the island of Bahrain. According to useconomyabout.com this rich economic bloc has an estimated population of 39 million inhabitants with an income per capita that goes from US$24.200 in Saudi Arabia up to $179.000 in Qatar!

Photo by netcarshow.com

Maserati Kubang. Photo by netcarshow.com

Those numbers, along with their will to educate their people in order to expand their position in the world, have made of this region an important pole for all kind of investments. Car manufacturers have realized the importance of being there, specially after analyzing this particular market. The GCC is world’s largest market for SUV in terms of market share. All kind of SUVs count for 34% average of market share, which is higher than the historical SUV market, America, with 30%. Arabs don’t have any problem with gas prices, while their roads are big enough to allow the largest SUV to go around. That’s why it is not hard to hear that best selling car is the Toyota Land Cruiser, or to see lots of Nissan Patrol, Chevrolet Tahoe or Ford Expedition. Just in Qatar, 18% of total sales during 2011, corresponds to large SUV (F 4X4 segment)! On the other hand, small cars are really difficult to see as they count only 0.5% of total market.

 In this context SUV makers as Jeep must find an important place. Jeep’s portfolio offers models from C to E SUV segments and fit perfectly the needs of people desiring big and powerful offroads. In 2011 the brand, along with the Dodge Durango had an average market share of only 2.1%, very far from the absolute king, Toyota. Unfortunatelly, the brand is not well known in these countries and the competition with GM and Toyota makes things even more difficult. Anyway, taking into account the image Jeep has, its background making real SUVs, and the latest products such as the unique Grand Cherokee or the classical Wrangler, it is perfectly possible to reach bigger numbers. In fact personal forecasts take to 55.000 units of Jeep by the year 2016, after repositionating the brand and offering even larger and more luxury products than the Grand Cherokee. Ofcourse, that goal does not include the great welcome extra luxury SUVs from Maserati would have during the coming years, another brand to develop in this reach region.

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2 responses to “Looking for opportunities: Middle East car market

  1. Pingback: What comes for Jeep « Fiat Group's World·

  2. Jeep has a beautiful reputation in Saudi Arabia, we even call the SUV class vehicles “Jaib” which is how we pronounce Jeep in Arabic, so even someone who has bought a Land Cruiser will answer “Jaib” when someone asks “what did you buy?”

    Unfortunately though, we suffer from below par after-sale services from almost all our auto dealers, and the worst of them all is non other than the Chrysler Dodge Jeep dealer according to recent poll by the ministry of trade and commerce. (http://mci.gov.sa/MediaCenter/News/PublishingImages/istbyan/MCI%20-%203.%20Chart%20CSS.jpg), more than 22,000 people participated in this poll, I know that it is in Arabic but the colors are an indicator of the customer satisfaction, more deatils about the poll are published on the Ministry’s website.

    Jeep has the potential to be one of the greatest brands here, and it is still selling quite good, but if Fiat wants to achieve its 2018 goals, then it should really look to expand its dealer network in the region, we have at least 4 dealers for GM, and 2 for Nissan, and god knows how many for Toyota, and Fiat comes and assigns the same dealer for Alfa Romeo and Fiat brands, which is why I’m probably going to get a Volvo.

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