Market maturity: the GCC turns to look ahead

Despite the economic and political turmoil in the region, the industry is suddenly exhibiting an extraordinary sense of resilience, optimism and general positivity


By and large, industry news is typically a toss-up between cautious optimism and subdued pessimism, but this month, despite the oil price depression, despite stalling projects in Saudi and despite the dissolution of Kuwait’s parliament over the threat of cuts to subsidies, it can’t be helped — there is an overwhelming sense of positivity issuing from this month’s magazine.

Even the actual decline in Volvo’s sales reported in this month’s news section seems like a white lie — because you need only to see that Volvo CE’s order intake increased by 17% in Q3 — which is pretty ineffectual bad news.

Equally, in the two product focus features this month (on telehandler and excavators), the actors are not oblivious to the poor state of the market — and yet their overall mood is one of ebullience and pragmatic, can-do attitude.

The only plausible explanation that I can think of for this generalised merriment is that the regional industry has finally torn itself away from the fantastical memories of 2006 to 2008.

Enough time has finally passed for the collective consciousness of plant, machinery and vehicles suppliers, vendors and end users to admit to themselves and each other that it is a brave new world out there, and that the only way to face it is head on, wearing a smile.

My experiences talking to people in the industry seem to confirm this. As little as a year ago, people would frequently refer back to 2006 or 2008, comparing and contrasting the state of their businesses now with what it was then.

But I don’t hear that anymore — perhaps because 2015 was a good year, enough to let people forget, or perhaps because the drop in the oil price knocked the industry out of its dream that a hyper-charged market might return.

Either way, the shift in sentiment is profound, and I would hope, a positive development. The industry no longer appears to be looking back; rather, it is looking squarely ahead.

The other things that has been repeated again and again this month is manufacturers and dealers looking for new markets — people mentioning the UAE and Turkey together.

The collapse in the oil price appears to have shaken the archetypal boundaries of the GCC. Companies that once only looked inwards are much more frequently looking outwards.

On many levels at once, the industry is maturing its outlook: operators are diversifying away from single brands, dealers are looking to more countries, and manufacturers are redefining the scope of their engagement.

The big interview with Roland Schneider this month revolves around the move by Daimler to reorganise its regional organisation to keep an eye on North Africa and also, furtively, on Iran.

In recent months I have heard more and more of this talk in the region: companies looking towards the subcontinent — India or Pakistan; others looking towards Africa or Central Asia.

Nobody is ignoring the GCC, but the industry is no longer fixating on it. People are responsible for the GCC as well as other regions. People are no longer moaning about the market — they are sitting up, looking ahead and all around.

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Construction Week - Issue 765
Jun 29, 2020