February 2015

Will the oil prices affect the automotive industry in the Middle East?

This has been the ‘sentence by mouth’ lately around the Middle East and GCC. The new command of lowering oil prices has been pinched. Let me put it straight: the famous era of cheap oil and high growth for the Arabian Gulf is quite over! The region will need to learn to live in an era of reduced oil revenues, budget shortages and less public spending.

It is a cycle which doesn’t end. It is similar to an apple jar. Whenever one apple is damaged it will affect the other apples in the jar. The currency exchange in Europe and Russia has changed. Dubai is counting on tourists much more than the production of oil, yet it is getting more lavish day after the next. When there are no tourists, there is no spending. And when there is no spending on car rentals and aftersales vehicles then there aren’t huge car fleet sales. Car fleet sales are among the main backbones for every car manufacturer. If it goes down then the power of spending money on marketing and advertising will be lower.

Dubai’s basic economic strategy is to diversify away from oil requirements and use the revenue from oil (Abu Dhabi) to fulfill the evolution of a diversified economy. For other countries in the GCC that would be difficult mainly because their economy depends on oil production. But I want to note Lebanon as an example, because it is not a country producing oil, where it is very convenient that the prices of oil decreased six months ago from almost $USD 25/20 liters to $USD 14/20 liters.

Anyhow, a quick brief on our February issue.

We covered the Detroit Auto Show this year with many hot debuts from production vehicles to concept vehicles. I flew to Iceland for the first drive of the new Land Rover Discovery Sport. It has well-earned our front cover story!

In our regional drive section, in Jordan we drove the new Kia Sorento. In our editors’ choice section, in Dubai Ershad drove both the Maserati Ghibli S Q4 and Volvo XC60. In Beirut, we drove the Hyundai Azera. For our long term test drive, we continue our journey onboard the Chevy Silverado.

We enjoyed a road trip onboard the new Audi S3 Sedan and Sportback in Germany. We drove above 500 km including stops from Dresden to Munich.

In the ride with us section, a young married couple and daughter joined us on a weekend to drive in the 2015 Volvo XC60.

I leave you here. I hope you will enjoy our diversified issue. Don’t forget to keep yourself updated via our social media platform. Stay posted.

- Issam Eid, Editor-in-Chief

Cover Story: Land Rover Discovery Sport

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