Gulf 4 x 4 wars (page 1 of 3)

Spearheading the auto industry's regional growth is one category of vehicle - the sports utility vehicle (SUV) or four-wheel drive (4WD).

Almost all major carmakers have launched or are about to launch 4WD vehicles in the Gulf market. The year began with German automaker BMW's introduction of the X-5, a luxury model. The X-5's regional success has caught even the manufacturers by surprise. The first 500 units shipped to the Gulf were sold within just a few days. There are now waiting lists all over the region for the X-5, and BMW's German factories are unable to produce enough cars to meet the demand. BMW expects that the X-5 could soon account for a third of its regional sales and hopes to sell over 1,700 units in the region this year, putting it on a par with its perennial rival Mercedes Benz.

Nissan, Mitsubishi and Cadillac have all followed BMW in launching new or upgraded models this year. Several other conventional passenger carmakers, such as Porsche and Volvo, are also preparing to enter the lucrative 4WD segment. Unlike in Europe or North America, where the 4WD craze began barely five years ago, this segment has always been strong in the Gulf as four-wheel-drive vehicles are particularly suited to the region's desert terrain and hot temperatures.

"The first 4WD came to this market nearly 60 years ago," says Michel Ayat, the general manager of Nissan's main dealer in the Gulf, "and soon became the most popular mode of transport because it was conceived for the region, which did not have paved roads and where people have big families. For several years, the 4WD dominated the scene."

Although increasing prosperity in the Gulf has seen sales of passenger cars increase - according to the US Department of Commerce, 60,000 cars a year are sold in the UAE alone - the 4WD dominates the market. Four-wheel-drive vehicles account for over a quarter of all car sales in the region - nearly three times as much as in Europe or the United States. Last year, 4WD sales in the Gulf totaled over 110,000 units, with the Saudi Arabia and the United Arab Emirates being the two largest markets, accounting for over 70 percent of the market between them. The UAE is the largest 4WD market outside the rugged territory of Australia and has one of the largest ratios of state-of-the-art automobiles to population size in the world.

Global challengers. Japanese manufacturers currently dominate the Gulf 4WD market. Toyota alone has 40 percent of the market, selling 40,000 units in the region last year. One UAE Toyota dealer alone sells 10,000 4WDs a year. Nissan and Mitsubishi hold another 30 percent. The rest of the market is evenly split between American and European manufacturers. American carmakers, led by General Motors, have 10 percent of the UAE automobile market share and the volume of US-made 4WDs imported into the region is growing.

Toyota and Nissan dominate all categories of four-wheel-drive vehicles - large, medium and compact, as defined by engine capacity. The two Japanese carmakers' combined sales make up over 60 percent of Gulf 4WD sales in each of these categories. Toyota and Nissan have both launched models that have been very successful in the region. Toyota's Landcruiser is the regional bestseller in its category. Nissan's winning 4WD model is the Patrol. Both vehicles are big, with powerful engines, sufficient ground clearance, good handling and off-road capability - just right for the region where the families are large and powerful engines are needed to tackle the largely unpaved roads.

A decade ago, the competition between Nissan and Toyota was much keener.