Classic car drives into the UAE on a budget

The classic British car marque MG has motored on to the UAE landscape, but it is positioning itself as an affordable luxury.

Morris Garages (MG) Cars, founded in the UK in 1924, has formed a partnership with the AW Rostamani Group, which also sells Nissan and Renault in the Emirates.

Although MG is a heritage brand in the UK, with famous buyers including the Duke of Edinburgh and Prince Charles, its newest models will be rolling off the showroom floor at moderate prices, starting at Dh64,000 (US$17,424) for the MG550, said Michel Ayat, the chief executive of AW Rostamani Automotive.

The cheaper price is made possible because the brand is now owned by Shanghai Automotive Industry Corporation (Saic), and partially produced in China.

"Today, the market is for quality at the most affordable prices," Mr Ayat said at the official launch in Dubai yesterday.

AW Rostamani has begun selling the MG550 and the MG750, and will introduce three other models, including the MG6 sportscar, this year.

With the moderate price tag and a rebound in the UAE economy, AW Rostamani and MG aim to capture 5 per cent of the European luxury car segment in the Emirates this year, Mr Ayat said.

Car sales in the UAE were hard hit in 2009, with domestic sales dropping by an estimated 40 per cent, dealers say. The market rebounded last year with sales growth of about 7 per cent compared with 2009, Mr Ayat said.

In the first two months of this year, car sales across the Emirates grew by an estimated 13 per cent compared with the same period last year, he said.

"This means that this year, I expect the market to be double digit [growth]," Mr Ayat added.

Despite the recovery, consumers still want to stretch their dirhams further and the prices reflect that, said MK Rajkumar, the director of AW Rostamani.

"Earlier, MG was trying to compete with the likes of Mercedes-Benz, price-wise as well as feature-wise," Mr Rajkumar said. "Now, this shift to China has given big leverage for us to keep the luxury price but at a very competitive price."

And for further growth, AW Rostamani is looking to tap into the emerging markets of China, India, Saudi Arabia and Iraq, Mr Ayat said.

The conglomerate, based in Dubai, aims to cash in on the booming Chinese market, not by selling cars on the ground but by distributing its brands, he said.

The tie-up with Saic and Zhengzhou Nissan Automobile late last year was part of this strategy, Mr Ayat said. "We strongly believe that they will expand their line-up, and we strongly believe that the Chinese brands will be recognised and accepted in the coming years," he said.

AW Rostamani also acquired a Honda dealership in Delhi in the fourth quarter of last year as a first step into the lucrative Indian market.

In the Middle East, AW Rostamani has introduced the ZNA brand into Riyadh, Saudi Arabia, and has plans to enter Jeddah in September and Dammam by the end of the year.

In Iraq, the company sells Nissan and Renault cars and is looking to add more dealerships.

"Iraq has 26 million people, same as Saudi Arabia, and there will be demand for automobiles," Mr Ayat said.

aligaya@thenational.ae