Rivals rattle dominance of Japan's car makers

International rivals are looming large in the rear-view mirrors of Japanese car makers in the UAE, putting the Asian country's dominance under threat.

Ford, Renault and General Motors (GM) have all reported robust increases in sales as supply issues rocked popular Japanese brands such as Toyota, Nissan, Mitsubishi and Honda.

"If I was a Japanese manufacturer, I would be worried," said Bill Carter, the valuations manager at Autodata Middle East, an independent vehicle information provider.

"I would certainly have one eye over my shoulder looking at what's coming behind me."

He said most manufacturers had been predicting an exceptional year for sales last year, but expectations were dampened by the earthquake and tsunami in Japan and floods in Thailand, which heavily affected the supply of vehicles and parts, particularly for Japanese marques.

"Everybody was forecasting a record year," said Mr Carter. "But the market has not ended as high as expected."

Industry experts estimate sales in the UAE grew 8 to 11 per cent last year on the previous year.

Ford yesterday reported a 50 per cent increase in sales of Ford and Lincoln passenger cars in the UAE last year, compared with 2010, driven by the Expedition and the Edge models.

Overall, Ford sold 65,000 cars in the GCC, an increase of 50 per cent on the previous year.

"They have grown market share," said Mr Carter. "The way they are evolving their vehicles is the right way to go."

Ford has introduced a number of new models to the region in the past year, adding new technologies to their cars such as self parking functions and airbags in the backseats.

GM last week said its sales rose 13 per cent last year compared with the previous year, having had the best sales month ever last month in the Middle East. GM's dealers in the region reported total sales of 139,431 vehicles for the year.

Renault remains the fastest-growing brand from Europe, with sales up 33 per cent in Dubai and the Northern Emirates last year, according to Felix Welch, the director of sales and marketing at Arabian Automobiles, the dealer for Renault, Nissan and Infiniti.

"We are building the case for Renault and seeing massive growth," said Mr Welch. "The Korean brands like Kia and Hyundai are also coming up fast."

Ramesh Amei, the product manager at Al Majid Motors, the exclusive distributor of Kia across the Emirates, said sales had increased 23 per cent in 2011 compared to the previous year.

Alongside major supply issues last year, Japanese brands also had to contend with higher priced cars as the yen appreciated.

"The movements in the yen really can hurt us," said Mr Welch, referring the sale of Nissan cars, which grew about 25 per cent last year.

Despite the heady increases in sales for many rival manufacturers, Toyota, Nissan and Mitsubishi are still the dominant players in the market.

Analysts estimate Toyota, Nissan and Mitsubishi to have sold about 80,000, 38,000 and 30,000 cars in the UAE, respectively.

That compares with 6,000 for Ford, 8,000 for Kia and 2,000 for Renault.

"We are holding our own," said Karl Hamer, the managing director for Al Habtoor Motors, which distributes Mitsubishi cars in the UAE. "Japanese cars have always been perceived as reliable for this region."

Mitsubishi stopped selling three models in the UAE last year, Mr Hamer said, which was partly responsible for a drop of 9 per cent in sales last year on the previous year.

"We are still punching above our weight," he said

Al-Futtaim Motors, which is the exclusive distributor of Toyota and Honda, is yet to report sales figures for last year.

rjones@thenational.ae