Nissan will not build another manufacturing plant in the MENA region unless there is a free-trade agreement between Arab countries, says Carlos Ghosn, its chief executive. The car maker has a plant in Egypt and a factory under construction in Tangiers but will not establish another in the region unless cross-border trade is streamlined, Mr Ghosn said in Abu Dhabi yesterday.
"We need a free-trade agreement between the Arab countries," he said. "This is the best way to boost and act as an incentive for car makers to establish capacity in the Middle East. "As long as we don't have a free trade [agreement], or at least effective free trade in the Middle East, it will be very difficult to go and make an investment of large capacity if you cannot sell in a seamless way in Arab countries."
Nissan exports about 50,000 cars a year to the Middle East from South Korea, and Mr Ghosn said the company planned to boost production overseas, in part to offset an unfavourable exchange rate created by the rising yen. Over the past couple of years, the yen's rise has limited Nissan's Middle East sales, he said. "If you take a look at the historical evolution of the Japanese brands in the Middle East, the increase in market share has been very steady - from us, Toyota and the other Japanese brands," Mr Ghosn said.
"But since 2008, it doesn't happen any more. The best we're doing is holding market share. Why? Because we are, in a certain way, bearing the headwind of the currency." The company is expecting to sell slightly more cars in the region for the financial year that ends next March 31, said Gilles Normand, the corporate vice president for Africa, the Middle East and India. The company expects to sell 130,000 Nissan and Infiniti cars in the GCC, and a total of 200,000 in the wider MENA region for a slight increase over the previous year but not quite up to the levels during the last boom, Mr Normand said.
"The market has not come back there yet, but somewhere quite close to 2008." The region continues to be one of the biggest markets for the 4x4 Nissan Patrol, which has doubled its market share to 20 from 10 per cent since the launch of the new model in February, Mr Normand said. Nissan's latest global sales figures also point to a strong recovery. In the first quarter of its fiscal year, to the end of June, Nissan sold a total of 954,000 vehicles, up 32 per cent from the same period last year.
Net revenue increased 35.3 per cent to ¥2.05 trillion (Dh88.24 billion), while operating profit was ¥167.9bn yen, up from ¥11.6bn in the same period last year. Mr Ghosn said he was confident this would be a record year for the car industry, despite the slowing recovery in the US and China. "The industry is facing a market with slower growth than expected, or a slower recovery than expected, but then at the same time a strong boom in specific markets, like China," he said.
aligaya@thenational.ae
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BORDERLANDS
Starring: Cate Blanchett, Kevin Hart, Jamie Lee Curtis
Director: Eli Roth
Rating: 0/5
The specs
Engine: 1.5-litre 4-cylinder petrol
Power: 154bhp
Torque: 250Nm
Transmission: 7-speed automatic with 8-speed sports option
Price: From Dh79,600
On sale: Now
Directed: Smeep Kang
Produced: Soham Rockstar Entertainment; SKE Production
Cast: Rishi Kapoor, Jimmy Sheirgill, Sunny Singh, Omkar Kapoor, Rajesh Sharma
Rating: Two out of five stars
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MATCH INFO
Uefa Champions League quarter-final second leg:
Juventus 1 Ajax 2
Ajax advance 3-2 on aggregate
Company%20Profile
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UPI facts
More than 2.2 million Indian tourists arrived in UAE in 2023
More than 3.5 million Indians reside in UAE
Indian tourists can make purchases in UAE using rupee accounts in India through QR-code-based UPI real-time payment systems
Indian residents in UAE can use their non-resident NRO and NRE accounts held in Indian banks linked to a UAE mobile number for UPI transactions