In an exclusive interview with Arab News, Mike Belk, CEO of Daimler Middle East and Levant — Mercedes-Benz cars, outlined the company’s strategy in the region this year and confirmed that the Saudi market has the highest penetration of the luxury salon S-Class in the region.
The company is planning to introduce the new C-Class, the S-Class Coupe, the CLA 45 AMG and the face-lifted CLS.
Belk believes the company is in top position among German rivals in the region and points out that Mercedes-Benz takes pride in the fact that vehicles sold in the region by Mercedes-Benz stay in the region.
Belk notes that GCC markets are different from other markets in many aspects such as younger age group of drivers, and higher propensity for customization.
He stressed importance of service and maintenance capacity to match growth in sales and emphasized training of nationals to the same standards applied by the company globally.
These are the highlights of the interview:
• On the MB strategy for this year
The strategy for the region this year is effectively a continuation of the very successful path that we have been on now for the past two years. The focus of that is to optimize the potential for volume growth. We have not only exciting new products to launch this year, we also have a major growth that we are seeing in our sales of SUVs and 4X4s, and we hope to match the ongoing success of our traditional saloon segment of the market.
• How important is the Saudi market to MB?
The Saudi market is hugely important for us in the region. In terms of the absolute volume and in terms of vehicle sales it is our second largest market. In terms of population, Saudi Arabia represents one of the biggest marketplaces for our products, and we see a significant importance in terms of the growth strategy between now and the end of the decade. There are attractive new products with the A-Class, which take us into a new segment of the market and with the large number of younger people. In Saudi Arabia, particularly important to us is the S-Class segment, and Saudi has the highest penetration of the S-Class of any of the markets in the region.
• Are you planning to introduce new models to the region? What are they and what is their timetable?
2014 sees an exciting year for new product introductions, the most significant in terms of its impact on volume will be the new C-Class which we are due to launch in the second semester. Complementing the C-Class, we then have the very exciting new S-Class Coupé, which we previewed at the Dubai Motor Show in the fall of 2013. We also have two exciting launches in the region in the shape of the CLA 45- which is the AMG version of the CLA and lastly, we have the facelift of the ever-popular CLS.
• Among the three major German marques, what is the rank of MB sales in the region? And is that likely to change in the foreseeable future?
Mercedes-Benz is positioned very well in the region in comparison to our competitors although the market is very competitive here. In terms of registrations, as in cars sold to customers, and driving on the roads in the region, Mercedes-Benz is in the leadership position. One aspect which sets Mercedes-Benz apart is that we can truly say all sales made in the region are vehicles that stay in the region, and we are very proud of that.
• With a UK background, how is the GCC market different from other typical MB markets in Europe and Far East?
I think the GCC market differentiates itself in a number of ways. The average age of our owners and drivers here in the region is between 15-20 years younger than it would be in typically mature and developed. There is a much higher demand and appetite for luxury products in the high end models in our range, or in the very well specified models. There is much more interest in customization and individuality. The region is yet to develop in the terms of financial services. There is also a small but emerging middle class in the region and clearly that is very important for prestige car manufacturers.
• Has the maintenance and service capacity in the region increased by the same ratio as sales figures’ rise over recent years?
The maintenance and service capacity is improving and if we look at the growth in the vehicle sales and the size of service and maintenance work that is required, we are at the moment easily able to match the current growth in vehicle sales through current facilities. Nonetheless, we are very aware of the growth that is taking place, and the growth plans that have been agreed with our distributors throughout the region in every country see the creation of new integrated sales service and paths locations.
• Do you monitor dealers’ performance in the region and are their bonuses, merits or remarks said to good performers and under-achievers?
We very much believe in measuring performance in three core areas and there is a very detailed tracking system which is linked to the payment of a variable margin so the distributors’ ability to perform also results in a higher bonus payment. The three key areas that we track are the dealer/distributor standards programs. Secondly their performance is measured in the customer satisfaction survey. The last area that we measure very closely is obviously sales performance.
• How is training developing for GCC nationals?
We have both training that takes place in each market and also centralized training through our training centers. Not only do we do training, but we also measure performance. In the last year, we have expanded that so now, for all of our key management positions, we have a Certified Management Program to make sure that employees that meet our standards can be assessed and certified. The certification standard is the same as that which Mercedes-Benz has put in place
everywhere.
