The UAE is vital for Haval, according to the Chinese car maker, which aims to double its sales in the country by capitalising on the demand for 4x4s.
The company is pinning its hopes on the H6 sports utility vehicle, which was unveiled in Dubai on Thursday by Swaidan Trading, the automotive division of Al Naboodah Group Enterprises. One of the UAE's oldest family conglomerates, Swaidan has six showrooms spread across Dubai, Abu Dhabi and the Northern Emirates.
Made by Chinese manufacturer Great Wall Motors, the H6, priced between Dh69,900 to Dh79,900, is crucial for the Haval marque in the Emirates. "H6 is going to be the lifeline of our brand in the UAE. In late 2016, Haval's sales were on a small scale as we had brought only limited number of vehicles because we first wanted to test the market," said Greg Cottrell, general manager of the automotive division for Swaidan.
“Now we are seriously looking forward to expanding our market share with this new launch. The H6 is apt to disrupt the market and give tough competition to other SUVs.”
Chinese brands in the UAE are fast closing the gap on Japanese and European rivals, according to Alpen Capital corporate research firm, with lower pricing and maintenance costs. Chinese vehicle sales in the Emirates are forecast to rise by 100 per cent annually to capture a double-digit market share by 2020, Alpen said.
The UAE and wider Arabian Gulf market is an increasingly competitive arena for off-road vehicle makers. Rolls-Royce's much-awaited 4x4, the Cullinan, which was launched in May this year, has attracted strong demand in the region, according to the luxury car company.
"Response from our customers and prospects, the media and fans of the brand worldwide has been overwhelmingly positive,' Rami Joudi, regional communications manager of Rolls-Royce Motor Cars MEA and India, said in August. "The order books for the Cullinan are also exceptionally strong and already stretch well into 2019," he told the UAE Business Review.
Lamborghini and Bentley have also entered the off-road market. The Italian car maker launched the Urus in December, while the British brand's Bentayga started production in early 2016.
Al Naboodah first started selling Great Wall vehicles in the UAE in 2001. The company was among the first of the Chinese car makers to enter a market dominated by European, American and Japanese brands. In 2013, Great Wall started marketing Haval vehicles under that brand name and entered the UAE market in late 2016.
Great Wall's global revenue rose 17 per cent in the first six months of 2018, although this was from a low base last year. However, Bloomberg forecasts its shipments could decline over the rest of 2018 as the H6 loses buyers to an increasing number of competitors.
"The UAE automotive market is reducing. It is around 20 per cent down year-over-year this year. So one of the drivers to go forward is SUVs,” said Mr Cottrell, who declined to share Haval's sales and revenue figures for the country.
Still, he said more new H6s have been ordered for the UAE "as we are expecting high-volume sales. Interest of buyers is building up very fast and we ordered what we believe is enough for at least the next four-month supply."
In home country China, H6 makes up a large part of Haval’s overall sales, and its franchise owners in the UAE hope to replicate the same success.
“In China, Haval is one of the most expensive brands, but still they are selling more than 100,000 units a month and H6 constitutes nearly 40 per cent of the sales,” Mr Cottrell said.
However, he said China was a different market to the UAE: “In China, there is a lot more competition for Haval because there are many [Chinese] manufacturers. But in the UAE, we don’t have much competition from Chinese producers.”
Electric vehicles are also part of Haval’s expansion plans in the UAE. “In China, we already have electric versions of Haval and by 2020 we are expecting to see similar models coming to this country,” Mr Cottrell said.