JEDDAH: Sources in the Saudi car sector have said that the Nissan vehicle brand intends to terminate its exclusive distributorship agreement with Alhamrani United Company (AUC) and appoint Alissa Auto Company (AACO), with whom it is engaged in negotiations, as its sole distributor in Saudi Arabia, Al- Eqtisadiah reported on Sunday.
The newspaper said AACO had in fact begun marketing and selling Nissan cars. AACO had lost its exclusive agreement with General Motors at the beginning of this year. GM, who had four distributors in the country, will officially terminate its agreements with AACO and Balubaid in the coming weeks, while the two remaining distributors, Aljomaih Automotive and Universal Motors Agencies, opened new branches in different regions to compensate for their absence in the market.
During recent months, AACO has been working to gain the confidence of Nissan as the matter of appointing it is still being negotiated, especially as the agreement between Nissan and Alhamrani still active.
“Alhamrani suffered administrative problems and lowers sales,” said the sources, adding that Nissan intends to strengthen its presence in the country.
The pioneering Japanese car manufacturer has been in the Saudi market for 50 years through AUC.
A World Trade Organization specialist reportedly said that GM’s procedure to limit the distribution of their cars in Saudi Arabia to two agents “does not increase monopoly” and that it is a lawful procedure any company in the world has the right to implement.
The sources told the newspaper that GM’s car prices would have nothing to do with the decision. “The prices will remain the same. GM seeks to strengthen its position in the Saudi market and gain more customers given the strong competition,” they said.
“No distributor can raise prices without the permission of the manufacturer and the latter seeks to void damages to reputation and the lost of customers,” they added.
In Saudi Arabia nearly 30 car distributors are operating all over the country and introducing sales, marketing and maintenance services.
Nissan Motors to replace 50-year exclusive auto distributor
