Venturing into a growing economy rich in resources

Michel Ayat, the chief executive of Arabian Automobiles, explains the importance of Iraq as a new market

Michel Ayat, the chief executive of Arabian Automobiles, says Iraq is a rapidly changing market.

Michel Ayat, the chief executive of Arabian Automobiles, which is part of the AW Rostamani Group, explains the importance of Iraq as a new market and why Renault has set up shop there.
AW Rostamani is part of the joint venture in Iraq. Why are you there?
Iraq is not a side issue, it's a major market and it's a rapidly changing market. It's not like any other market in the Middle East; it needs lots of knowledge of the types of customers and dealings with the government.
Can you give an example?
If you buy a car, you have to pay about US$4,000 (Dh14,690) for the number plate. That is, unless you get it through the government. The government is about 80 per cent of the market in Iraq, with retail the remaining 20 per cent. The government gives cars to employees or sells them on to unions.
How big is the market?
We estimate 100,000 cars are sold a year, which we think can increase five times.
How do you estimate that figure?
If you compare the cars in the market to the population, the percentage is very, very low compared with other countries in the Middle East.
There have been a number of protests recently. Surely Iraq is a risky investment for retailers?
The economy is on the right track and there is a lot more stability in Iraq now compared to a few years ago. With the formation of the elected government, the goal is to build the economy and market regulation.
Given the sweeping unrest in parts of the Middle East and North Africa, is this optimism premature?
No, I can say stability is returning gradually. We are concerned with the economy and can see things getting better and better. The country is rich in resources such as population, water and oil.
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