Two years after the killer tsunami decimated demand and halted automobile production in Japan, the country’s automobile manufacturers are looking ahead to do what they do best — dominate the market.
Despite 2012 being the year of recovery, a forecast of vehicle demand in 2013 released by the Japan Automobile Manufacturers Association (Jama) in January this year shows that the industry has still not recovered completely.
Jama’s 2013 report forecasts total sales of new passenger cars and commercial vehicles at 4.74 million units, a decline of 11.7 per cent from the previous year. The standard and small-sized passenger car category and the mini passenger car category are predicted to share a similar fate, forecasted to drop 14.2 per cent and 10.3 per cent respectively from 2012.
However, those are forecasts for the future. Here are the facts as they stand today.
In January this year, Honda Motor Co. posted record sales of 3.82 million vehicles in 2012, a 19 per cent year-on-year increase. Nissan Motor Co.’s global sales in 2012 increased 5.8 per cent year-on-year to 4,940,133 units, an all-time calendar year record. Toyota Motor Corp. led the pack with a record 23 per cent increase in global sales, with 9.75 million vehicles sold last year, outselling General Motors and reclaiming the number one spot in the world.
Callum Knox, Head of Valuations at Autodata, a provider of vehicle identification and pricing information in Mena and Europe, says, “Last year was an exceptional year for new car sales, with the market up approximately 30 per cent from 2011. We expect the regional growth to be more natural this year at around 12 per cent.”
With their efforts resulting in a Guinness record (the Nissan billboard in Terminal 3 at the airport is the world’s largest indoor illuminated advertising sign) and the world’s largest dealership (as of October this year, the UAE will be home to the biggest Mitsubishi dealership in the world), if it were up to the brands in the country and their respective distributors, the predicted figure will soon exceed 12 per cent.
Toyota had a few new entries roll into the region, including the much-anticipated FT86, launched last year. Without pausing for breath, 2013 began with the launch of the revamped RAV4 and the Avalon. Toyota has also confirmed that the company is preparing to release three more vehicles before the end of the year.
Samir Cherfan, Managing Director, Nissan Middle East, explains that Nissan holds a very strong number two position in the market, which translates to more than 15 per cent market share in the Gulf and a brand image stronger than ever. Over the past 12 months, Nissan has launched six new core models, the Sunny, Micra, Altima, NV350 Urvan, Sentra and Pathfinder — almost a new model every eight weeks.
“By the end of fiscal 2016, the company will aim to achieve a global market share of 8 per cent and increase its corporate operating profit to a sustainable 8 per cent. Nissan Middle East’s contribution to this strategy is critical. We will contribute to this global target by further increasing our actual 15 per cent market share in the Gulf,” says Cherfan.
This year will also see the new Mitsubishi Mirage hatchback make its way to the UAE next month, followed by the all-new Mitsubishi Outlander in July and a new sedan based on the Mirage in August. 2014 will see a new larger sedan launched along with the newer models.
“Mitsubishi is still number three overall in the market and when our new products come in, maybe we can climb to number two in the market as well,” says Karl Hamer, Managing Director, Al Habtoor Motors, the local distributor for Mitsubishi.
Not to be left out, Honda will be releasing a few new vehicles in the near future as well. Honda introduced the ninth-generation Civic in June 2011, followed by the new CR-V in April 2012 and the new Accord in January 2013. The company plans to release nine new models over the next two years.
“In the recently concluded financial year, Honda sales in the Middle East region was up 32 per cent when compared to the same period last year,” says Arijit Basu, General Manager — Sales Operations, Honda Motor Co. Middle East Office. “Our sales were affected in the short term due to limited availability parts and components. But despite these unprecedented challenges, Honda showed resilience by shifting production of key models from Japan to the US and launching key refreshed models on time.”
Last year was a record year for Al Habtoor Motors, selling 33,000 vehicles and witnessing a growth in market share. “You would see approximately 1,800 cars less than what we sold in 2011. That is because the Grandis, the Nativa, the Eclipse and the Galant were stopped last year. Four of our models were taken out of the range, so to sell 33,000 is quite an achievement,” says Hamer.
Stock availability and sales at Al-Futtaim Motors Toyota were affected for a period of time during 2011 and into early 2012 due to the natural disasters. >
Luckily the company managed to recover in less than a year, sooner than they expected, and supply was normalised.
Hamer claims that the success of Japanese cars here in the UAE is partly thanks to the dealers. “The UAE market has increased. That is because of the dealers and the good offers we put out here; we are a lot more aggressive now. I’m not alone, we are all doing it and the UAE consumers benefit from that,” he says.
At the end of February 2013, Nissan announced that sales of the Nissan Sunny in the Gulf jumped a remarkable 50 per cent in the first three quarters of the 2012 financial year compared to the same period in 2011. The following month, Nissan released figures that showed 2012 to be the best year ever in the Middle East for the Nissan Patrol, selling more than 14,000 units, representing a 66 per cent increase in sales from the previous year.
With six new models over the past year and more to come, Nissan does not seem like it wants to stop there. The manufacturer has recently embarked on a first-time global campaign in order to reposition the brand. Under this new umbrella, Nissan launched a multimillion-dollar campaign in Dubai International Airport with a potential reach of 60 million passengers during the financial year of 2013. Another world-first comes in the form of Mitsubishi’s new facility in Abu Dhabi. Al Habtoor Motors is currently in the final stages of building its new dealership in Abu Dhabi with an investment of Dh100 million.
With Japanese manufacturers back on their feet and exceptional regional performance supporting this recovery, coupled with healthy competition and a wide range of brand-new models, the outcome for the rest of the year depends on which of the following two will prevail: forecasts or facts. n
