Dubai: Going by the industrious way they have gone about building their presence here in the last three years, it may not be too much of a stretch for Chinese automotive brands to win a 10 per cent market share by 2020. A few large fleet orders and further gains in selling commercial vehicles could easily set them up towards that sizeable share, industry sources say.
Currently, Japanese manufacturers make up 65-67 per cent of the UAE market, with American, European and Korean brands carving up the rest of it. But, now, most of the leading Chinese manufacturers have entered into dealership arrangements to get into the numbers game in the UAE.
“Even now, the Chinese brands have models that only address, probably, 20 per cent of the market needs here,” said Michel Ayat, CEO at Arabian Automobiles Co and part of a group which represents MG, the UK brand now in Chinese hands, Dongfeng as well as the ZNA. “But when that model range widens to meeting around 80 per cent of what buyers need, that’s when things will start moving. It’s already starting to happen.”
In recent months, more of the Chinese made cars and small crossovers can be seen on the UAE roads. But the numbers are nowhere near to being a threat to the established names.
“But if a local dealership representing a Chinese make manages to secure a major deal on a fleet order, that’s when things can change overnight,” said an official at a Chinese carmaker. “It gives the manufacturer visibility and people will start saying ‘If’s good enough for the needs of a high-usage fleet operator, it should be fine with us too’. Every market has a price conscious buyer base and it’s now only a question of finding them in the UAE and coming up with the offers to get their attention.”
Leverage
For a second consecutive Dubai International Motor Show, the Chinese presence is quite substantial with an entire section of one hall taken over by them. Clearly, they are out to be seen and once that’s done, they can bring the leverage they can make on their pricing to do the rest of the talking.
“Like for like, we are getting to be the equal of any Japanese or Korean brand sold anywhere in the world,” said Wu Song, Director and General Manager of GAC (Guangzhou Automobile Co) GAC Motor, China’s sixth largest carmaker. “I would even say we are the equal to them in the categories we compete in — the goal is to make prospective buyers agree that this is so.
“In four of the six Gulf markets, we have already confirmed dealerships and that includes the UAE. Once we get to a point where these markets are giving us the volumes, we can the experience to move on the other markets.”
And a significant other for Chinese manufacturers would obviously be Iran. For some of them, the rationale is that if they are able to make an impact with the informed buyer in the Gulf, Iran would be a much easier market for them to get going.
“A combination of the right model, the right price and a dealer with a sharp go-to-market approach can make things happen for Chinese models in the UAE,” said “I don’t think dealerships have any reason to be shy about pursuing such a move with Chinese-made vehicles. They are clearly part of the automotive future in the UAE.”
The Chinese contenders parade their wares
It was in 2012 that Dongfeng Motors — the second largest Chinese carmaker — identified 10 strategic markets which included the Middle East. This led to signing up its UAE dealerships. “In the future, we will realise a sales volume of 300,000 units in overseas regions,” the company said in a statement. “We endeavour to develop Dubai into an overseas market with sales scale of 10,000 units.”