The Renault Clio is one of Europe's most popular cars. The chic, nippy hatchback is the urban runaround of choice for fashion-conscious young Parisians on a budget. A series of sexy television adverts, coupled with the Clio's curvaceous styling, have made the French supermini the car of choice for two generations of hip, continental women drivers.
In Dubai, though, you're more likely to see a polar bear on Sheikh Zayed Road than a Clio. In its place are thousands of bland, square-edged Asian sedans with the character and personality of a box. Why am I telling you this? Because the re-invigoration of the Renault brand into Dubai - announced this week - could have profound implications for the city's auto industry, and the economy as a whole.
Let me explain. In Dubai, local partners have a monopoly on distributing foreign goods. Whether it be Toyota cars or Toshiba televisions, one UAE firm will have exclusive distribution rights throughout the city, and quite often the Northern Emirates too. If, like Toyota, you have a thrusting, dynamic partner such as Al Futtaim, you sell cars quite literally by the boatload.
If, however, you're local partner isn't quite so inspired, you're lucky if you get to hand out a few brochures, let alone sell the product. Historically, international companies saddled with a weak partner could do little to change this. These exclusive distributions contracts were notoriously difficult to break. Here's the significance of the Renault deal announced this week: Renault has a new local partner.
From this month, Renault will be distributed in Dubai by Arabian Automobiles, part of the powerful Al Rostamani Group. Arabian Automobiles has been distributing Nissan cars here for more than 30 years. The switch in Dubai follows the announcement that Carlos Ghosn, CEO of Nissan in Japan, will also take the top job at Renault in France.
This may not sound like a revolution, but it's a rare thing for a company like Arabian Automobiles to win a new car marque. It's not completely unprecedented for brands to switch local partners - The Al Tayer Group won the Ford franchise only relatively recently. But the Renault deal it underlines the seismic shift underway in the UAE, with the protected and inefficient business practices of the past being swept away in favour of a new era of competition.
That's good news for foreign investors, who will feel increasingly confident that the UAE's commercial laws are not stacked against them. It's good news for consumers, who will benefit from greater choice and better service. And it's fantastic news for Dubai's growing army of girls-about-town, who will finally be able to buy an affordable car that fits their fashionable lifestyle.
© 7Days 2005
