Chinese cars make inroads into UAE market

Improved technology, lower maintenance costs and affordable prices making them more popular

Dubai - Despite the fact that Japanese models have been ruling the UAE automotive market for years, Chinese vehicles are also gaining popularity in the country and all stakeholders — manufacturers, dealers and buyers — are happy with the performance and are optimistic for significant growth in the coming years.

Although Chinese passenger cars entered the UAE market a couple of years ago, initial results show encouraging signs, according to manufacturers and dealers in the UAE. The future of Chinese brands look bright in the country and significant year-on-year growth is also expected, they added.

Chinese vehicles’ sales is expected to grow 100 per cent year-on-year in the UAE and their market share will touch double-digits by 2020 compared to 2.7 per cent in 2014, according to an industry specialist based in Dubai.

Last year, the automotive market’s size was 405,000 vehicles in the country and Chinese models contributed only 11,000 to the total volume. Japanese models dominate the market with a 68 per cent share, followed by those from Europe (12 per cent), the United States (10 per cent) and Korea (nine per cent).

“Other brands will grow around five to eight per cent per annum and Chinese [models] will grow 100 per cent year-on-year,” AWR Automotive chief executive officer Michel Ayat told Khaleej Times in an interview.

Citing the reason for this skyrocketing growth projection, Ayat said: “They have improved a lot and have the right technology so customers will never face any problem.”

Defending his high growth projection, he said that first of all, affordable prices will be the main reason or prices might be around 20 per cent less than competitors. The cost of ownership will be much lower as the maintenance cost will be less compared to others, he explained.

The chief executive mentioned that Chinese car exports are very less as China’s domestic market is huge. But now they are focusing more on overseas markets, he added. During the last Dubai International Motor Show, eight Chinese car manufacturers participated, showing their interest in the UAE market is growing, he said.

He added that seven to eight Chinese vehicle brands are available in the UAE but most of them are at a very low profile and people even don’t know about them.

Talking about the target customers for Chinese cars, he said that there are three groups of car buyers in the country. The first group, he explained, belongs to young people or new expatriates.

“Our strategy is to attract new buyers, which belong to the first group. The second group wants to replace the car after using it for three to four years. The third group looks for a big car for the family,” he explained.

Earlier this month, AW Rostamani Trading introduced a new Chinese model in the UAE after signing an exclusive dealership with Dongfeng Motors, or DFM. The new partnership was marked by the launch of two DFM models in the country, the S30 and H30 Cross.

AW Rostamani’s long experience in the UAE automobile market is expected to be a key factor in making DFM a highly-regarded regional automotive company and a name that will capture a significant market share for passenger vehicles in the country.

“We are confident that DFM’s high-quality standards that result in excellent products, combined with AWR’s known customer service, will ensure the success of the DFM brand in the region,” Ayat said.

AW Rostamani Trading is already selling light commercial vehicles of China’s Zhengzhou Nissan Automobiles since 2010 in the UAE. These include single- and double-cabin pick-ups 4x2 and 4x4. “ZNA is growing steadily and I am happy with the growth,” Ayat said.

Al Habtoor Motors’ Chery, JAC

Al Habtoor Motors introduced two Chinese brands — Chery and JAC — in the UAE in less than two years and the company said both of them are performing well with increasing sales volume.

In October 2013, the Dubai-based automobile dealer launched four models of Chery. “We have handpicked the vehicle models that we thought would meet and exceed the expectations of our UAE audience,” Al Habtoor Motors sales director Joe Rogan told Khaleej Times.

Four vehicle models of Chery are available in the country. Amongst the passenger models Al Habtoor Motors has two sedans, the Chery E5 and Chery E8; and one SUV, the Chery Tiggo. In the commercial line-up the company has one model, the Chery P5.

“The response to Chery vehicles has been good and has been getting better every month. We are also expecting to launch another passenger model in the second quarter of 2015,” Rogan said.

The company has only one showroom for Chery in Dubai and it is planning to open its first in Abu Dhabi in 2015. Al Habtoor Motors has sold 700 units as of the end of March 2015, according to the company. “Our plan for 2015 with the expected new models to arrive is 1,000 units and we hope to grow it from there,” he added.

Responding a question about the buyers of Chery cars, he said: “Considering the demographic break-up of UAE, majority of our customers are Asians. We also receive a lot of customers from other GCC nationalities.”

Given the tough competition, Chinese manufacturers have upped their game in terms of technology, safety, performance and quality. Regardless of the high growth of the Chinese automotive brands in this region, the biggest market share belongs to the Japanese and the German manufacturers.

“But our Chery sales figures are a great indicator of how the UAE residents are becoming more accepting and trusting of our brands. Al Habtoor Motors has positioned the Chery vehicles in a particular segment and we are positive that we will further boost the automobile sector in the UAE,” the sales director said.

In the beginning of 2014, Al Habtoor Motors announced the launch of JAC Motors in the UAE. Since then it introduced a couple of passenger and commercial vehicles in the market. But JAC was officially launched in the UAE with the grand opening of its first showroom on June 16, 2014.

“JAC has performed very well, on both commercial and passenger vehicles,” Rogan said.

The JAC passenger sector in the UAE has two vehicles — the spacious J5 a 1.8L sedan, and the seven-seater family car J6. Both vehicles are equipped with a 1.8L Mitsubishi Engine. The JAC Commercial lineup starts from mini-buses to heavy trucks.

“All JAC models are performing in a great pace, with the LCV and M1 leading the commercial line-up and the J5 leading the passenger line-up,” a spokesperson said.

“JAC entered the UAE market at the beginning of 2014 selling up to March 2015 300 vehicles.”

Promotions, beautiful designs also help in attracting buyers

Dubai - Affordable prices, promotional offers and beautiful designs are among the factors in making a decision to favour Chinese cars, new Chinese car owners told Khaleej Times.

— abdulbasit@khlaeejtimes.com