Interview with Mr. Thierry Sabbagh, Managing Director, Nissan Middle East

What is your estimate of the size of the spare parts market in the UAE?

The UAE is a regional trade hub and an extremely important market for Nissan, one that we have been strongly committed to for over five decades. While the size of the automotive spare parts market is challenging to measure due to the number of automotive and non-automotive stakeholders present, a conservative estimate would be between the AED 30 to 40 billion mark.

How would you describe the importance of the UAE market to this industry?

Experiencing rapid growth in recent years, the importance of the UAE as a market for automotive spare parts both regionally and globally cannot be undermined. The UAE’s geographical location and high standards of business contribute to its role as a major hub, as do the freezones across all emirates that provide excellent logistical gateways for spare parts businesses in the country. Serving as a host through multiple parts-related exhibitions such as Automechanika, the UAE has further cemented its role as the nerve center for businesses and the importance of the booming automotive parts sector.

Nissan’s commitment to the UAE has solidified over the past five decades and is evident with a footprint of over 250 authorized genuine parts wholesalers, service centers and over 25 spare parts outlets operated by our trusted partners, Al Masaood Automobiles and Arabian Automobiles in the UAE. Nissan also offers customers a broad range of genuine spare parts including oil filters, brake pads, timing belts, spark plugs, and air filters, for the highest level of safety and reliability at competitive prices.

Fake spare parts are widely spread. What damages do they cause for companies, individuals, and the economy in general?

The damaging effects of counterfeit spare parts are countless – they represent serious threats to the safety of drivers and those around them and continue to be a major cause of accidents in the region. Together with the UAE government and local partners, Nissan has made great strides in eliminating the number of counterfeit spare parts in the market through awareness campaigns that improve the safety of our customers. An often-overseen downside of fake spare parts is the wastage caused due to the shorter life span, leading to more parts required per car in the long run. An associated issue is also the impact on authorized parts dealers, diminishing revenue generation due to the significantly lower prices of fake spare parts.

What solutions are needed to overcome the semiconductor chips crisis, which has greatly damaged the automotive industry?

The semiconductor shortage has not only affected the automotive industry but also had a negative multiplier effect in the consumer electronics and lighting industries amongst others. As Nissan continues to make innovation accessible for all, we continue to coordinate with global colleagues and local partners as we inch closer towards rectifying the shortage, by increasing manufacturing footprint globally and refining logistical concerns that surround the semiconductor shortage.

What are the main challenges facing this sector?

While multiple stakeholders are working together towards the betterment of the industry, I believe some of the main challenges facing the automotive spare parts sector are the widespread presence of low-quality counterfeit parts that have damaging effects to customers, businesses, and the economy. To combat this, Nissan is working with government entities while introducing multiple awareness campaigns to educate drivers about the dangers and risks of fake spare parts.

The other challenge facing the spare parts industry is the global supply chain backlog and the limited production of spare parts in the GCC region. By working closely with our local partners, we are expanding inventories to cover any potential gaps due to logistical constraints. In doing so we can ensure our customers aren’t affected and receive the high-quality service and parts that they have come to expect from Nissan.

How would you describe the competition in the market?

Serving as a land of opportunity for businesses in the region and globally, the UAE market is competitive by nature for all industries, automotive spare parts included. That said, at Nissan customers remain at the core of our operations and so we are constantly evaluating the requirements of the market to offer customers products and services that cater to their evolving needs.

How would you describe your performance in the UAE market, and how important is this market to you?

The Middle East remains a key region of opportunity for Nissan and our presence in the UAE dates back over fifty years. This has been possible with our trusted partners, Arabian Automobiles Company, the official distributor of Nissan vehicles in Dubai and the Northern Emirates, and Al Masaood Automobiles, the official distributor of Nissan vehicles in Abu Dhabi and Al Ain. In 1994, Nissan was also the first Japanese carmaker to establish a regional headquarter in the Middle East, furthering our trust and dedication to the region, the nation, and its people.

During the first six-months (April 2021 – September 2021) of the company’s 2021 Fiscal Year, Nissan recorded a staggering 46.3% increase in sales across the Gulf region, comprising Bahrain, Kuwait, Oman, Qatar, and the UAE. This equates to a market share increase of +0.3 points- equivalent to 1.8% and was strongly supported by our best-selling model in the region, the iconic Nissan Patrol. Continuing its reign as the Hero of All Terrain, the Patrol witnessed a 27% increase in sales across the Gulf, while the Patrol Safari range experienced a 51% increase in sales – cementing the region’s adoration for the legendary SUV. This was echoed by other models in the line-up, including the Nissan X-Trail and KICKS recording a 129% and 14% increase in sales during the first half of FY21.

Our strong, growing line-up of vehicles and parts offerings, along with our reputation as a trusted automaker has been the cornerstone of our success, leading to us delivering higher sales than anticipated, despite the headwinds caused by the Covid-19 pandemic. In the past 12 months, we have also expanded our aftersales product line-up to include Nissan Genuine Battery with two years warranty and launched an aftermarket brand, Value Advantage® that offers customers Nissan-validated parts at affordable prices. Offering customers greater convenience, we have also grown our aftersales network in the region with the introduction of three new service facilities, boosting overall capacity to over 2,500 vehicles per day and over 700,000 vehicles per year across 10 markets.