The Kingdom Tower in Riyadh.
Nissan plans to expand in Saudi Arabia. © The Commons
The Kingdom Tower in Riyadh.
Rahim Abdul
Last updated: April 29, 2014

Is the feel-good factor driving record Middle East car sales?

sponsoredcontent.jpgAs the Middle East along with the wider community continues to emerge from the clutches of the recent worldwide financial crisis, car sales are beginning to seriously take off. With major global car makers recently announcing a raft of positive sales figures, it does seem the feel-good factor is alive and kicking and well and truly with us once again.

A good example is the expansion plans of Nissan Saudi Arabia which aim to build on the 60-year relationship the Japanese car giant has enjoyed with the Kingdom. The plans were unveiled towards the end of 2013.

According to online media website Al Bawaba, the company committed itself to renewing the bond with KSA via a re-energized customer-focused network based on three key pillars: a quality network of dealers with a KSA-wide presence; the availability of the full range of innovative and exciting models; and the delivery of the Nissan brand experience “innovation that excites”.

Across the rest of the Middle East, the company continues to expand reach and market share, targeting further opportunities in countries such as Turkey, for example.

Al Bawaba says, “In December 2013, Nissan Patrol sales increased by 58% compared to 2012, representing an SUV market segment share of 28%. Similarly, the Nissan NV350 Urvan achieved a record segment share of 26.3% in the 3rd Quarter of the 2013 fiscal year. The Nissan NV350 Urvan has also become the best-selling vehicle in its class in Qatar in Q3 fiscal 2013.”

The United Arab Emirates (UAE), KSA's diminutive neighbour, is also a favoured target of the Japanese multinational vehicle manufacturers. A report by Dubai Customs cites Japan as the UAE's top automobile trading partner, accounting for 25% of foreign trade valued at just over US$2 billion for the first half of 2013 alone. Japanese brands are traditionally regarded as more reliable than their European and US counterparts, explains Gulf Business.

The leading business magazine says car giant Toyota registered strong sales growth of 31%  across the Middle East in 2012. During the record year for the Toyota and Lexus brands, the Japanese manufacturer delivered a total of 660,285 vehicles. Globally, sales of Toyota and Lexus cars totalled 8.72 million units, an increase of 23% compared to 2011.

But car sales are not just growing across the Middle East. In the UK, for example, sales increased by almost 14% to 688,122 units in the first three months of 2014 when compared to the same period last year.

Much of the increase occurred in March alone, fuelled by demand for the new 14-plate. A rise of 17.7% saw March reach 464,824 new car registrations, a 10-year high according to figures released by the Society of Motor Manufacturers and Traders (SMMT).

SMMT Chief Executive Mike Hawes described the level of growth as surprising, saying it was a reflection of intensifying consumer confidence and the availability of great new products.

He added, “Given the past six years of subdued economic performance across the UK, there is still a substantial margin of pent-up demand that is contributing to a strong new and used car market.

“There has never been a better time to buy a new car thanks to attractive finance deals and advanced technologies that often make new cars cheaper to run. We expect the market to continue to perform positively for the rest of the year, albeit at a more modest rate.”

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