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French Version

Mideast auto sales rev up

Incomes from rising oil prices seen as major factor in regional markets
Much-hyped 5,000-euro Dacia on display for first time outside Eastern Europe

The Middle East is fast becoming one of the world's most dynamic automotive markets, according to leading manufacturers in town this week for the 2004 Lebanon Motor Show.

Showcasing some 400 models from 68 producers, the biannual event is expected to draw up to 200,000 visitors from across the region, according to the event's organizers, the Lebanese Association of Vehicle Importers and Promofair.

"The market has become much more sophisticated and demanding over the last five or six years," said Mark Bishop, managing director of Porsche Middle East. "The biggest jump happened over the last 18 months."

The German luxury manufacturer is touting booming growth in the region's niche category, with Porsche regional sales catapulting from 942 units sold in 2003 to 2,392 units sold in the firm's 2004 fiscal year, which ended in July.

Bishop said sales in the Middle East - Porsche's fastest growing and fifth largest market - could be partly attributed to rocketing oil prices and their corresponding revenues.

"I think this has helped everyone in the niche market," he said, adding that Porsche's Cayenne sports utility vehicle accounts for 80 percent of regional sales.

But with some estimates placing demand in the United Arab Emirates market alone to be worth up to 70,000 annual units, sales opportunities are bound to crop up across the entire spectrum of the region's income segments.

"This is a huge market, with huge potential," said Michel Dorleac, regional manager for Dacia, Renault's famed 5,000-euro car that will hit Middle East markets next year.

But the Romanian-made vehicle will start at $9,000 in Beirut, where it is being showcased ahead of France for the first time outside Eastern Europe.

Patrick Weil, the director of the entry car range at Renault, said he expected buoyant sales in the Levant countries following the sale of some 25,000 units since September between Romania and Hungary.

"There are also a lot of migrant workers across the Gulf, and even in Saudi Arabia we are seeing high levels of unemployment," he said.

New manufacturing techniques - such as a greater reliance on human assemblers over robots - has allowed the French manufacturer to produce Dacia at low cost, Weil said.

In addition to its operation in Romania, Dacia will also be produced in Renault factories across South America, as well as plants in China, Russia and two in the region.

By mid-2005, Dacia, which will eventually be offered in a range of models, will be produced in Morocco and in Iran by 2006, according to Weil. With seven factories online, Renault plans to roll out 700,000 Dacia models in 2010, an amount equivalent to production of the firm's top selling Megane model.

Renault and Porsche representatives both touted Beirut as an important test market for Middle East sales with the local motor show gaining prominence for its growing number of exhibitors and promotional space. Over half a dozen local banks were also on hand to assist with purchases and offer consumer loans.

Habib Battah
The Daily Star

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