Nadim Mehanna, an automotive engineer, was the first to introduce motoring on TV in the Middle East in 1992. In 1999 he founded N.M.PRO, a multi-media production company producing five different motoring shows for five different TV channels, the most popular ones being ‘Motorshow’, ‘Speed’ and ‘RPM’. N.M.PRO launched www.motoringplanet.com in 2002, the world’s largest motoring website by content volume — for car fans of the Middle East and the world over — where visitors can watch more than 1,500 hours of video-on-demand (VOD) and free live motoring web TV, broadcast worldwide 24 hours a day.
E What is the current state of the luxury automotive industry in the region?
The luxury automotive market in the region is the healthiest in the world. What I mean by this is that we have all the new models from most of the manufacturers. In the region people like cars, the car is a member of the family, they are proud of it.
I was at the last Paris Motor Show where I saw one guy from the Middle East who wanted to buy one of the concept cars. Concept cars are very confidential, each hand made, cost millions to produce and give you ideas for the future. The executives at the stand were astonished and tried to explain to the man that they cannot sell the concept car, that it is not for sale. This shows you how much people in the Middle East love to have the newest cars. Look at the Dubai syndrome — they want to have the biggest, the longest but it is nice sometimes it makes things happen.
Dubai, is especially healthy, because it is running the whole Middle East automotive business as most of the car manufactures have head offices and regional offices there. This is a very important development in the way that manufacturer run their Middle East operations in the region. Now the manufacturers know the market a lot better than before, when Nissan, for example, would run their Saudi operations from Tokyo.
With their regional headquarters in Dubai they have hands on contact with all clients, dealers, after sales, media and so on. They also have all the insight of what it is going on in the region and they monitor what the competition is doing. The dealers are also very active, firstly because they themselves are very passionate about cars, they also love the competition to have the biggest showroom, highest sales and biggest after sales facilities and so on.
But now they are also ‘afraid’, so to speak, because they are monitored a lot more closely by the head office, by the manufacturers, which are now based next door. For instance, ten years ago none of the showrooms respected corporate identity; every showroom was done based on the mood of the dealer or his family. You would have cars being sold next to fridges — if the dealer sold other products, they would all be combined in one place.
Now if the dealer has three different brands then they all have to be displayed separately, with all the appropriate corporate identities that go with each brand. There is a lot more professionalism now and having the head office here is making the Middle East look very corporate.
It has been important as well for the media that the manufacturers moving to the region because we now have access to products much faster. The media now in the Middle East is seeing concept cars sometimes before Europe because of the good market here. In general, there is a large amount of growth in all the GCC, where they are making good money.
E Have facilities been improved in the region?
A lot, especially the after-sales workshops are also something that has been greatly improved and this is very important. Before, you would buy a very advanced car and a warning light would go on in the dashboard and you would have a problem, the mechanics would look at you and would not know what to do. Now, due to the presence of manufacturers in the region, after-sales teams are trained and monitored much more effectively and car dealers are putting a lot bigger emphasis on this sector. In Kuwait, for example, the biggest and most advanced after-sales facility workshop in the world was just opened for GM. This means it is not about just selling cars; you have to sell the car and you have to be able to repair it properly and bring back the customer with your next model. This is something that has not been happening in the region until now. So currently the whole cycle is rotating properly in the region.
E Is there going to be a shift to mid-size SUVs in the region, as people want more fuel-efficient cars?
To a certain extent, in the Middle East people love big cars. Families are bigger in the Middle East than in the US or Europe and also petrol is a lot cheaper. Firstly, it must be made clear that there is a misusage of SUVs. Before, these types of cars were used for industrial and military purposes. It has only been the last 10 years where there has been a huge demand for
SUVs on the road, for many reasons. People like the high cars for psychological reasons, for the perception of safety and the space, although it does not have as much space as they think.
In the GCC there is a huge chunk of SUV buyers that do go off road to the desert and in the desert you need to have a big car, big tires, high ground clearance. So for those that just use their SUV on the road, yes, some will move to medium-sized
SUVs but I would say this will only be 20% of the big market. The mid-size SUV will get most of its clients from those that are upgrading from sedans. But for those that have many kids and go to the mountains on the weekend or the desert then you have to have the big SUV; it is a real need.
E Lebanon this year had amazing growth but this is obviously not sustainable. What is the country’s market capacity?
The market here will not exceed 30,000 units. The growth in Lebanon this year is an exception. You had companies like IMPEX having a growth of 111% but this will not continue.
The market in Lebanon is not based on expatriates like in the Gulf where you have 50-60,000 people coming in every year. In Lebanon you also have people leaving and feeling very upset with the situation.
What happened this year is not a real indication of the market as there were just many people waiting after the 2006 War and the 2007 tensions. In the last week of May, when the plane landed from Doha, everyone came out and bought cars. Buying cars was like compensation for the buyers as a reward for getting through the troubles.
The market here is very emotional, even if there is a small incident people stop buying cars. Next year, I think, car sales will go up but in a much more calm and sustainable way.
E Will there be a move to green cars in Lebanon?
There is only one dealer in Lebanon that has tackled hybrid cars and this was BUMC, who was the first to import the hybrid Toyota Prius, which is a medium sedan and can do 400 plus km per 20 liters of petrol, which is amazing for this size of car. But you have to pay around $35,000 which is double what you would pay for this sort of car normally. They will import the new model of the Prius in 2009.
When looking at reducing the engine size I have not seen this trend. In Lebanon people like options, like having a DVD in the back of the car and when you want these luxuries you have to have a big car. Also, the tremendous rise in petrol has not been constant and now it has dropped again. Some companies did reduce the size of their car fleet but it did not happen in a significant way.
E What are the most successful cars in the Lebanese market at the moment?
Asian cars have been in the top spot for the last few years. Japanese and Korean cars are the most popular in Lebanon; it is a continuous fight between Nissan and Toyota for the pole position. These cars are popular because they are very reliable and don’t consume a lot of petrol, added to a very good resale value.
E In Lebanon more sports cars are sold than the rest of the region. Why is this?
The Lebanese love to show off and, of course, if you come with a convertible sports car it will be much more effective when you park in front of Sky Bar. The nature of the country is that there is no real restriction on speed and the mountain terrain is also good for these types of cars. The dealers as well are much more aware of the importance of having sports cars in their showroom. Plus, we have the rich GCC tourists that come every vacation and they also love to show off with their cars, and have bought them here and keep them here.
