Hyundai launched its new Genesis in Dubai on April 8 to kick-start sales in the Middle East, a week after the luxury sedan went on sale in the U.S.
The Middle East launch came even before the car's debut in China, the world's biggest car market, or Europe, showing how much importance the carmaker places on the Arab market.
With the growth of car sales slowing down in emerging markets such as Brazil, India and Russia, the Middle East is becoming a land of opportunity for Korean automakers.
◆ Big Sales of Luxury Sedans
With oil cheaper than water, the Middle East is a bumper market for big and luxury cars. Of the 330,000 cars that Hyundai sold in the Middle East last year, the Grandeur, Genesis and Equus luxury sedans took up 17,000 units. That is 10 times higher than the luxury sedan sales of 1,616 units in China.
Given that Hyundai's total sales in China are over 1 million cars, the Middle East accounts for a much greater portion in the luxury sector.
Korean luxury sedans are cheaper than European cars but deliver good performance. Hyundai says it sold 4,080 Genesis in the Middle East last year, compared to sales of 3,542 units in the BMW 5 Series.
◆ Great Potential
The Middle Eastern market still has great potential for growth. Korea's car exports to the Middle East jumped to 630,000 units in 2011 from 420,000 units in 2009, but the figure has remained around 600,000 in recent years, largely because of instability after the Syrian civil war broke out in 2011. Experts say car exports will be back on track when the situation stabilizes.
Korean carmakers are busy expanding their business. Ssangyong opened a branch in Turkey last year to gain a bridgehead into the region. The company hopes to increase sales of its SUVs, which are in high demand.
Renault Samsung regards the Middle East as a main export market along with Europe and South America, and will launch its new models there from 2016.
Hyundai and affiliate Kia have expanded their Middle Eastern branch and hired more staff as they sold over 500,000 cars there last year. However, experts say fierce competition with foreign brands will be inevitable.