DUBAI, 20 March — International enterprises facing retrenchment in Europe and America due to the global downturn have been forced to shift focus and work to develop smaller but still profitable markets elsewhere. With its young, rapidly expanding population and lack of production facilities, the GCC is an ideal region for the sale of many high quality consumer goods. DaimlerChrysler is one of those firms now looking to increase sales across the region. It manufactures an extremely popular minivan, the Grand Voyager, which has sold over nine million units worldwide and over 10,000 in the Middle East. The vehicle has also won the LBC/Sport Auto Middle East “Minivan of the Year” title for the last five years. In the Kingdom, the company anticipates that with the right marketing plan the Grand Voyager will increase in popularity as both as a family vehicle and as transportation for women and children using a family driver. The reason for this is that the minivan has many custom features such as independent rear airconditioning control, easy anchor infant seats, shopping bag hanging hooks, child-friendly side doors and the largest cargo space in its class — plus it’s affordably priced.
“We understand that the Chrysler brand in Saudi Arabia has not had the strongest image in the past,” said David A. Glorius, sales and marketing director, Chrysler/Jeep/Dodge, Middle East. “But we have already taken steps to consolidate our operations in the Kingdom and we are about to invest heavily in the region. We are also winning numerous independent quality awards, which are improving our image and re-sale values.” Glorius explained that in the past, Chrysler was sold by United Arab Motors in the Western Region and elsewhere in the Kingdom, Al Esayi Trading Company represented the Dodge and Jeep brands. This created a less than ideal distribution network and caused confusion among consumers. DaimlerChrysler facilitated a merger between the two groups, which resulted in Chrysler, Dodge and Jeep branded vehicles all being sold through United Motors dealerships Kingdom wide.
“This gave us one voice and one pricing strategy in the Kingdom and we saw an immediate improvement in our brand recognition,” said Glorius.
Even so, according to Glorius, the start of the new venture was a bit slow. There were infrastructure issues to address. Necessary management had to be hired. Decisions also had to be made in how to support the brands in after-sales-service across the huge geographical distances of the Arabian Peninsula.
“I am very please to announce that final arrangements have been made for the construction of a new, state-of-the-art sales and service facility on Madinah Road in Jeddah,” said Glorius.
“It took United Motors quite a lot of effort to acquire the land needed for the new facility as the required acreage was not under the control of one owner. This will be an absolutely huge investment for them. The plans have been drawn up and construction at the site will begin in the next month or two with full completion expected in 18-24 months.”
Moving on to discuss the staffing situation at United Motors, Glorius emphasized that the United Motors management has been dedicated to hiring and training Saudis. On the management and sales side most all employees are now Saudis. There are still difficulties, however, in finding qualified Saudi service staff.
“United Motors is under the same governmental pressures to work toward Saudization as are all businesses in Saudi Arabia,” emphasized Glorius. “To be honest though, when selling a vehicle it’s easier to strike the right chord when a local is selling to a local. In the area of service, perhaps its time that all automobile companies in the region looked into ways to improve the level of training offered at technical institutes in the region so that local mechanics would eventually be commonplace.” DaimlerChrysler has a 24,000 square-meter parts depot in Jebel Ali, UAE, which was used in the past only by Mercedes distributors in the region. Plans are being made to have this become the depot for all MOPAR Chrysler parts within the year, leading to the closure of a European facility which currently serves this function. Glorius said that the fill rate in Saudi Arabia, which is parts immediately in stock at any service center, is about 93 percent. Close to 100 percent of all needed parts are in a central warehouse in Riyadh, available for next day delivery. The new arrangement will improve those numbers further.
Another change for the better in the Gulf automobile market came about due to the switch to unleaded fuel last year.
“When the Kingdom went to unleaded, everyone else in the Gulf followed suit,” commented Glorius. “This was beneficial to Gulf consumers of our products because we could stop investing R&D funds on innovations to help cars run better on leaded fuel. Instead those funds were invested in creating products that would deliver higher comfort levels to drivers and their passengers in the extreme climatic conditions found in the Gulf. Many more types of vehicles are on sale here now than before because they don’t need modifications to run on leaded fuel, so we can select from the wide range of products that we have available globally.”
What do Saudi drivers want in a vehicle? According to Glorius they look for high performance and large engines, coupled with every possible “bell and whistle.” White is still the predominant vehicle color in the Kingdom, but silver is catching up quickly because it is considered to be very elegant, yet reflects the sun’s rays well. Saudi consumers are also very discriminating when it comes to vehicle quality.
“Our current focus both in the Kingdom and internationally is on quality control,” said Glorius. “We must thank the Japanese because they are the ones who have spurred the industry on to new heights. In Chrysler’s merger with Daimler, all the quality control issues were re-examined. JD Power, an independent rating firm, has found that now all of our quality scores have risen dramatically but the Japanese have moved forward as well. In a recent JD Power quality report Chrysler, Dodge and Jeep were the only American manufacturer with manufacturing plants in the top six for quality. The push for improved quality management will continue. Our biggest challenge right now in the Gulf is getting customers to try the cars so that we overcome any lingering and unwarranted quality control phantoms from the past.”
