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MidEast’s auto market is in for a U-turn

Gulf News 2020-01-14 09:25:49

The Middle East is known for its resilience… and the automotive industry is no exception. It not only faced a slowdown over the last few years, it is now gearing up for a stronger and brighter 2020.

Automobile sales across most countries in the region are - finally - ready for a turnaround. We see promising signs in Saudi Arabia where performance of the industry has improved as a result of government initiatives, and we expect other markets in the region to also pick up.

Among the key growth drivers that are expected to influence the automotive market are recovering economic conditions, increased per capita income, increased government spending towards infrastructure development, and the onset of Expo 2020 Dubai, which will pave a way for rise in demand for vehicles.

In terms of retail sales, SUVs will continue to be attractive options, demonstrating their enduring popularity in the UAE and the wider region. Also noteworthy that the crossover segment has been the fastest-growing in the GCC in recent years, with the new entry-size CUV now emerging as a hot sub-segment. Additionally, we are witnessing highly encouraging sales of smaller and more fuel-efficient options.

Fuel conscious

Rising fuel prices and increased awareness about the economic and environmental advantages of more fuel-efficient vehicles is driving this step-change amongst consumers. We are also looking to unlock potential in markets like Kuwait and Bahrain that have seen an uptick over the past year.

The concept of sustainable and autonomous mobility gained tremendous momentum in 2019, but we see it as one of the key focuses for the coming year in the UAE specifically - guided by the sustainable development vision of the government. Dubai also has one of the most progressive autonomous vehicles strategies in place.

It aims to transform 25 per cent of total transportation in Dubai to autonomous mode by 2030. In line with the government’s vision, Nissan’s “Intelligent Mobility” strategy defines the way cars are powered, driven and integrated into society. In an effort to aggressively tackle issues that confront the automotive industry, such as climate change, air pollution, traffic congestion and traffic-related accidents, the company has accelerated the development of Intelligent Mobility to address these issues head on.

Receptive ways

At Dubai International Motor Show 2019, we witnessed a regional audience with diverse mobility interests and expectations, most of whom are very keen on making the change to electric vehicles. Automotive brands have a crucial role to play in encouraging and inspiring consumers about EVs, ensuring that the positive impacts are accurately conveyed, both for themselves and the environment.

In this rapidly evolving automotive market, in which consumers are hyper-connected and well-informed, customer experiences have become a major differentiator for brands looking to build loyalty. The Middle East market is shifting towards a service-oriented model with automotive brands focusing extensively on the customer journey and consumer data.

Customers today expect a more digital and customized experience. Dealers are also implementing the shift from “product” to “service” mindset to address rising competition and growing consumer expectations.

Need for a digital switch

The importance and growing influence of the digital space is also one aspect that all automotive players need to consider. A survey conducted this year highlighted that, a fifth of UAE residents are likely to buy a first-hand car online. Although traditionally, we see online car buying in the UAE being associated with pre-owned cars, research shows that people are now opening up to the idea of buying new cars online.

Jumping on this trend, Nissan is committed to delivering omnichannel services that provide customers with consistency and continuity across all interactions. We have enhanced and implemented various digital tools to make customers’ online journey as convenient as possible.

There is no doubt that we will see significant developments across the region in 2020, however, technology and innovation will unlock a host of opportunities to enhance sustainable mobility, improve safety and elevate customer experiences and confidence – ultimately leading to sustained growth in the automotive industry.

- Thierry Sabbagh is Managing Director of Nissan Middle East.