4x4 fever takes Persian Gulf by storm

Government-subsidized gas prices
As oil wealth trickles into every aspect of life here, GCC governments subsidize gasoline prices. There are few places where owning a car is so inexpensive.

In the Emirates, a gallon of gasoline costs $1.70. In Saudi Arabia, gas costs about a dollar a gallon and in Kuwait, the price is about 83 cents per gallon. In the United States last week, the average pump price was $2.48 per gallon.

The economic boom in the Gulf has seen car sales rising more than 6 percent a year in the region and almost 10 percent in the Emirates, according to the Abu Dhabi Chamber of Commerce and Industry.

SUV sales in the Mideast will not be enough to buck up the 4x4’s fading fortunes. Overall, the Gulf market is about 5 percent the size of America’s, with about 700,000 vehicles expected to be sold in 2005, versus about 14.7 million in the United States. The Gulf market could even see automakers quashing production of some models that hold the most local popularity.

Camels no longer needed
In the energy-rich Gulf states, SUVs have a long history that harkens back to the days when they literally replaced camels for overland trips.

A few 4x4 models from 50 years ago are still popular. The Toyota Land Cruiser outsells all others in the region, accounting for 18 percent of 2004 Mideast sales for Toyota, the Middle East’s top manufacturer.

In the Emirates, the Land Cruiser dominates the ranks of 4x4s used by safari operators driving tourists deep into the orange dunes.

The Nissan Patrol, which is not sold in North America, is another longtime favorite of local Arab families. Land Rovers, too, remain popular.

“The Toyota Land Cruiser dominates the market,” said Gene Williams, a market analyst with Auto Strategies International in Cleveland. “They’re selling very well. In the GCC, the Land Cruiser was the top seller in all countries.”

General Motors, too, has its niche in Saudi Arabia. GM figures show that SUVs made up 25 percent of its overall sales in North America but 40 percent of its Mideast sales in the past year.

El-Khalil said GM’s giant Suburbans are popular with big Saudi families who traditionally drive for summer vacations to the cooler environs of Beirut and Damascus.

“This is probably the only market in the world where you’ll see growth in large and medium SUVs,” El-Khalil said. “It’s double-digit growth.”

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