chapter 5 marketing strategy in competetive...

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CHAPTER 5

MARKETING STRATEGY IN COMPETETIVE SCENERIO

5.1 ELEMENTS OF AUTOMOBILE INDUSTRY STRUCTURE IN UAE

Porter suggested that the nature and intensity of competition within any industry is

determined by the interaction of five key forces:

a) The threat of new entrants

b) The power of buyers

c) The threat of substitutes

d) The extent of competitive rivalry

e) The power of suppliers.

Figure 5.1

Elements of Industry Structure

Source: Michael Porter, Competitive Advantage.

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The automobile industry in UAE is highly competitive. The Automobile industry

structure in UAE can be analysed as below in terms of the above mentioned features

a) The Threat of New Entrants

As we have seen earlier that the changes ahead can bring the shift in the nature of

automobile market in UAE to low cost and fuel efficient products. This can fuel the entry

of new brands from China and Malaysia. The entry of new brands will fuel further the

competitive nature of the automobile industry in UAE. Also as the business environment

becomes more conducive and attractive for setting up production base, several

manufacturers may start considering this as a lucrative option, thereby adding to the nature

of competition in the region.

b) The Bargaining Power of Buyers

Virtually every brand is available in the UAE market though it is just 0.5% of the total

world market. This situation gives lot of leverage to the buyers and adds to the competitive

nature of the industry. The recent recessionary trends have also resulted in lots of expats

leaving the country, thereby reducing the concentration of buyers in the country. This

coupled with the high stock levels with the distributors has resulted in increasing the

bargaining power of buyers and putting pressures on the margin and profitability front.

c) The Threat of Substitutes

The increasing options for the public transport, particularly the Dubai Metro, are a major

substitute threat to this industry. Authorities hope that 30% of the population will be using

the metro by 2020. The northern emirates have also embarked on a major plan to improve

local bus network as a means of public transport.

d) The Extent of Competitive Rivalry

The industry growth in UAE is still being restricted due to the economic downtrends and

exit barriers for the dealers/automotive firms are high. These factors result in high

competitive rivalry amongst the firms to gain a minimal level of volume and share of

market.

e) The Power of Suppliers

In the current automobile industry structure in UAE, the suppliers enjoy considerable

power since it is not easy for the automobile firms to switch to other brands due to the

prevailing agency laws in UAE. But at the same time, the supplier or the principals also

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cannot have any number of franchises in the country (maximum of 2) which also puts

pressure on them to appropriately support their dealers/franchises so that they can be

competitive in the market.

5.2 COMPETITOR ANALYSIS

To be successful, the company must do a better job than its competitors of

satisfying target consumers. The design of competitive marketing strategies begins with

competitor analysis. The company constantly compares the value and customer satisfaction

delivered by its products, prices, channels and promotion with those of its close

competitors. In this way it can discern areas of potential advantage and disadvantage. The

company must formally or informally monitor the competitive environment to answer

these and other important questions:

Who are our competitors?

What are their objectives and strategies?

What are their strengths and weaknesses?

How will they react to different competitive strategies we might use?

The study of strategic postures which require the study of 7 P‘s (Marketing Mix) namely -

Product, Price, Promotion, Place, People, Physical Evidence, and Process Management can

also be undertaken. Although it is not possible to develop an exhaustive list of headings

under which competitive information should be collected, these are the principal areas to

which the strategist should pay attention on a regular basis:

1. Sales

Number of units sold

Sales trends

Market shares

Share trends

2. Customers

Customer profiles

Buying motives

Patterns of usage

Identity and image among buyers

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3. Products

Breadth and depth of the product range

Comparative product performance levels

New product policies

New product introduction

4. Advertising and promotion

Expenditure levels and patterns

Product literature

Sales promotions

5. Distribution and sales force

Types of distribution network used

Dealer objectives

Size, calibre and experience of the sales force

Sales force customer coverage

Stock levels

After-sales service capabilities

Customer service philosophy

6. Price

List prices and discounts by product and customer type

Special terms

7. Finance

Depth of financial resources

Patterns of ownership and financial flexibility

8. Management

Objectives (short and long term)

Identity of key executives

Competitive strategies

Organizational structures

Investment plans

Key success factors

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For each of the key automobile brand in UAE, the competitive information is as given

below:

1. Sales

Toyota significantly strengthened its market leading position in 2010 by achieving

highest ever market share of 36 per cent. The 2010 total year sales increased 33 per cent

against 2009. Toyota enjoyed considerably healthy sales during the first half of the year

despite the Japan calamity. Sales were up by 15 per cent during the year 2011 ending the

year with a total of nearly 80,000 units.

2. Customers

Customer profiles: Corporate customers, individuals in all the age range and income

levels.

Buying motives: Comfort, performance and reasonable maintenance costs.

Patterns of usage: Personal vehicle, commercial vehicle, lease and rental vehicle and off

road drives.

Identity and image among buyers: Reliable and durable.

3. Products

Breadth and depth of the product range: Wide range of customers from small car to large

4 –wheel drive, pick up trucks, vans and mini buses.

Comparative product performance levels: Very high.

New product policies: Environmental friendly, safe and convenient.

New product introduction: Toyota Zelas (2.5 L Engine).


Expenditure levels and patterns: Advertising focus on BTL activities.

Product literature: Leaflets and product catalogues are available.

Sales promotions: Wide range of promotions under ―Toyota Choices‖.


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Types of distribution network used: 9 sales showrooms available all across UAE.

Dealer objectives: To consolidate its position as the number one distributor in the UAE

by achieving new standards in customer satisfaction.

Size, calibre and experience of the sales force: Experienced and qualified sales staff

available.

Sales force customer coverage: Separate outdoor coverage teams.

Stock levels: Usually 2 month inventory levels are maintained.

After-sales service capabilities: 12 full-fledged service centres in UAE with further plans

to increase the service network in Abudhabi and Dubai.

Customer service philosophy: We care and it shows.

6. Price

List prices and discounts by product and customer type: Prices vary for fleet customers,

export customers and showroom walk-ins.

7. Finance

Depth of financial resources: The Al-Futtaim motors is the Toyota distributor in UAE. It

is a part of Al- Futtaim group. The Al-Futtaim Group, founded over 70 years ago, is one

of the most respected corporations in the lower Gulf Region. It operates collectively over

40 companies bearing the Al-Futtaim name and dominates many market segments in the

UAE.

Patterns of ownership and financial flexibility: Private ownership.

8. Management

Objectives (short and long term):

a) to consolidate their position as the number one distributor in the UAE by achieving

new standards in customer satisfaction.

b) to enhance service levels right across the company, from showroom to workshop.

c) to continue to foster Customer relationships.

Identity of key executives: Simon Frith, Managing Director.

Hugh Dickerson, Senior General Manager.

Competitive strategies: To Maintain and further increase the market share position.

Organizational structure: Each of the functional department (e.g. sale, service, parts) is

headed by a person who in turn reports to the Managing Director.

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Investment plans: Al-Futtaim Motors, the exclusive distributor for Toyota in the UAE,

has opened a new Toyota sales and service facility in Mussafah, Abu Dhabi. The launch

marks the beginning of an extensive investment in the expansion and renewal of the

market-leading brand's retail and service facilities in the emirates. The expansion is

scheduled to continue into 2011 with the launch of a flagship showroom in Aldar's Motor

World in Abu Dhabi and a further four facilities in Dubai.

Key success factors: Width of product range, excellent sales and service network and

strong management.

1. Sales

UAE sales posted a 35 per cent growth in the year 2011 for Ford. Sales in the country

crossed the 9,000-vehicle for the first time. In 2010, the Ford market share in UAE grew

to 5% with Ford Explorer as the best-selling car.

2. Customers

Customer profiles: Individuals with middle income group and preference for American

brand.

Buying motives: Safety features are preferred more.

Patterns of usage: Mainly personal usage.

Identity and image among buyers: Perceived to be having high safety features.

3. Products

Breadth and depth of the product range: saloon cars and four wheel drive vehicles in the

mid and higher price range

Comparative product performance levels: medium performance.

New product policies: Style, comfort and safety to be the main focus.

New product introduction: Ford Figo (1.4L engine)


Expenditure levels and patterns: Active in summer campaigns and DSF promotions.

Product literature: Leaflets, Product catalogues and e- catalogues are available.

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Sales promotions: Quarterly sales promotion schemes are worked.


Types of distribution network used: 8 showrooms available in various emirates.

Dealer objectives: Ford Motor Company recently recognized Al Tayer Motors as the

world's 10th largest Ford brand dealer. Their objective is to maintain higher standards of

customer service so as to retain this dominant position.

Size, calibre and experience of the sales force: Experienced sales force with separate

focus on corporate, retail and re-export customers.

Sales force customer coverage: Customer coverage is good.

Stock levels: Average inventory levels are at 2 month levels.

After-sales service capabilities: 8 service centres are there all across the emirates.

Customer service philosophy: The Service Excellence programme is a step-by-step

procedure designed to maximise convenience, productivity, flexibility, and customer

care.

6. Price

List prices and discounts by product and customer type: Separate price lists for

showroom and fleet customers.

7. Finance

Depth of financial resources: Al Tayer Group has investments in commercial real estate,

contracting, supply chain management, precision tools manufacturing and travel agency

services. Al Tayer Group operates leading, quality-focused businesses in automobile

sales and service, luxury and lifestyle retail, perfumes and cosmetics distribution,

engineering as well as interiors contracting. The Group‘s portfolio includes several of

the world‘s leading brands such as Armani, Bvlgari, Banana Republic, Ford, Ferrari,

Gucci, Gap, Harvey Nichols and Maserati. The Group operates over 180 stores across

multiple markets in the Middle East. Hence it is a financially strong group.

Patterns of ownership and financial flexibility: Established in 1979, Al Tayer Group is a

privately-held, diversified company with operations in 12 countries in the Middle East

and beyond. With over 7,800 employees from 95 different nationalities, the Group has

its headquarters in Dubai, UAE.

8. Management

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Objectives (short and long term): ―To make Passion our Currency, Relationships our

Bottom-line and Trust our Trademark‖ is the mission statement of Al Tayer Motors.

Philosophy and culture: The business group is known for its progressive work culture.

The philosophy of the group is – ―Success is more than mere statistics. It is steered by

our passion for excellence. Through each of our companies, we set out to define the

region‘s industry practices and create market benchmarks of international standards. We

believe in long term business relationships that are based on mutual goals, ethical

business practices and the single minded pursuit of delivering the extraordinary‖.

Identity of key executives: Saeed Al Tayer, Managing Director.

Ashok Khanna, CEO.

Competitive strategies: market penetration through network expansion

Organizational structures: A product structure is followed in Al Tayer Motors. They have

centralized the support function e.g. Finance. So one set of support functions services all

the product divisions. This design increases the horizontal differentiation within the

organization. Each division is headed by a General Manager and has its own hierarchy.

Investment plans: Al Tayer Motors has expanded its network with a new showroom and

after-sales facility in Fujairah, the largest in its network. The 120,400-square- foot facility

will represent Ford, Lincoln, Jaguar, Land Rover and Range Rover brands in the eastern

emirate. The showroom has a substantive spare parts department, a workshop, an

interactive area for customers and a dedicated area for approved pre-owned cars.

Key success factors: Strong management and focused marketing strategies.

1. Sales

Hyundai maintained 10 percent growth in the year 2010. In the year 2011 it witnessed a

40 per cent growth in sales in 2011 for the first seven months of the year compared with

the same period last year. For Hyundai, the strong sales came from the new models that

were introduced.

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2. Customers

Customer profiles: Lower to middle income group customers

Buying motives: Customers looking for lower budget vehicles or more features at lesser

price.

Patterns of usage: Within city drive vehicles.

Identity and image among buyers: Budget cars.

3. Products

Breadth and depth of the product range: Available in lower and medium price levels in

saloon cars and Four wheel Drives.

Comparative product performance levels: Considered as medium performing cars.

New product policies: Trendy and stylish design as well as vastly improved features, to

attract and satisfy youthful consumers.

New product introduction: Hyundai Veracruz (3.8 L engine, crossover utility vehicle).


Expenditure level and patterns: Juma Al Majid Establishment, the exclusive distributor

of Hyundai Motors in the UAE and Hyundai Motor Company, the official auto sponsor

for football's governing body, FIFA, teamed up for the launch of the ‗2010 FIFA World

Cup South Africa' campaign. Customers who purchased any Hyundai car between April

6 and May 25 in 2010 got a chance to win a travel package to the 2010 FIFA World Cup

in South Africa. The company expected to boost its brand image and sales through this

promotion.

Product literature: Available leaflets.

Sales promotions: Sales promotions are focused on providing easy affordability means to

the buyers like low installment finance plans.


Types of distribution network used: 7 showrooms all across UAE

Dealer objectives: The company is pressing ahead to achieve its goal of becoming top

five automotive brands in UAE through aggressive marketing strategies.

Size, calibre and experience of the sales force: Experienced and dedicated staff for

showroom and fleet sales is available.

Stock levels: Average 2 months.

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After-sales service capabilities: 10 service outlets are available all over UAE

Customer service philosophy: Quality service treated with utmost care.

6. Price

List prices and discounts by product and customer type: Separate prices for showroom

and fleet customers.

7. Finance

Depth of financial resources: The Juma Al Majid group of companies had a modest start

in the year 1950. Juma Al Majid partnership ventures operate in the fields of shipping,

construction, food-Imports, general trading, travel and other industries. The group is also

active in financial investments and portfolio management across the region and globally.

8. Management

Objectives (short and long term): To diversify into other areas of commercial activity to

contribute to the fledging nation's economy.

Philosophy and culture: Simple and highly effective philosophy of satisfying customers,

small or big, through a mix of honesty, integrity and social awareness has become

ingrained in all aspects of the business and is truly responsible for the group's unrivaled

success.

Identity of key executives: Isam Abu Nabah, President.

Competitive strategies: Focus on providing after sales service and improve perception of

product quality.

Investment plans: With the growth of Dubai as the commercial hub of the region, the

group has emerged a strong leader in all fields of its endeavor and is poised for even

greater challenges and achievements that await it in the future.

1. Sales

Arabian Automobiles, the distributor of Nissan, Renault and Infinity in Dubai and

Northern Emirates and the flagship company of UAE based conglomerate AW

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Rostamani Group sold 25,204 units, up 18% y-o-y, which generated record turnover of

AED2.5bn (US$ 6S.06mn) in 2009. In 2010, the distributor achieved a sales growth of

20% over 2009. Arabian Automobiles recorded an 18 per cent growth in sales during the

year 2011 compared to the last year, according to a spokesperson for the company.

Meanwhile, Al Masood Automobile, the exclusive dealer for Nissan Motor in Abu

Dhabi, returned to positive sales growth in 2010, after a 25% y-0-y decline in 2009. The

company‘s sales growth for 2011 was also in line with outlook for the industry as a

whole, a growth of 8.-10%. The company is expecting a positive reception for its new

model launches, spearheaded by the new Nissan Patrol SUV, which has accounted for

25% of its revenues over the last five years.

2. Customers

Customer profile varies from low income and middle income group customers.

3. Products

New product policies: Nissan Power 88 reflects Nissan‘s clear, global vision and

strategic direction through fiscal 2016: Nissan‘s extended new product plan will deliver,

on average, an all-new vehicle every six weeks for six years. The company‘s global

portfolio will have 66 vehicles and will cover 92% of all markets and segments. The

emphasis on sustainable mobility will continue, encompassing zero-emission vehicles

and low-emission technologies that support PURE DRIVE. Cumulative electric vehicle

sales for the Renault-Nissan Alliance will reach 1.5 million units.

New product introduction: Nissan Middle East F.Z.E. introduced Nissan 370Z Coupe, a

vehicle that reset the bar for affordable sports car design and performance.


Product literature: Leaflets, catalogues and e- catalogues are available.

Sales promotions: Recently launched ―Nissan Freedom‖ campaign aimed at providing

convenience for buying.


Types of distribution network used: 9 showrooms for new car sales and 2 showrooms for

used car sales are there.

Dealer objectives:

a) Be a preferred partner of our Principals.

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b) Develop win-win relationships with our customers.

c) Have modern and convenient infrastructure.

d) Be among the leaders in each of our business.

Size, calibre and experience of the sales force: Experienced sales staff is available.

Sales force customer coverage: Separate teams for showroom, corporate and re-export

sales.

Stock levels: Average 2 months inventory is maintained.

After-sales service capabilities: The nationwide network of 9 mechanical repair

workshops and 5 bodyshops are spread across all over Dubai & Northern Emirates to

ensure that customer gets the best service at his most convenient location.

Customer service philosophy: Strive to exceed Customer Requirements by delivering

high quality products and services. This is measured by conducting regular Customer

Satisfaction Surveys. The five promises are Convenience, Comfort, Punctuality, Value

and Quality Promises.

6. Price

List prices and discounts by product and customer type: prices are prominently displayed

in the showrooms with separate pricing for fleet customers.

7. Finance

Depth of financial resources: Arabian Automobiles Company (AAC) was established in

the year 1968, as part of the AW Rostamani business conglomerate, and the sole

distributor of Nissan Cars and Genuine Nissan Parts in Dubai and the Northern Emirates.

Over the years, AAC has emerged to be among the top players in the Automobile sector

with market leadership in certain pivotal segments of the vehicle market.

The Company has its head quarters in Dubai and markets passenger cars, 4 Wheel Drive

cars and commercial vehicles

Patterns of ownership and financial flexibility: Private ownership.

8. Management

Objectives (short and long term): The vision and mission of AAC is clearly stated as

below

Mission: 2009-2012 (The reason for our existence)

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―Our Mission is to enrich the lives of our customers through our people, products and

services by setting best practices in everything we do‖.

Vision: (Where we want to go)

―To be a world class organization by 2012‖.

―To be a USD 2 billion organization by 2012‖.

Philosophy and Culture:

1. AAC is committed to build a World Class Organization by adopting best practices,

promoting innovation and drive towards

2. To develop employee skills through training, motivation and empowerment. The

company works towards achieving Improving Employee Satisfaction.

3. AAC is committed to be a Responsible Corporate Citizen by sponsoring social

events, contributing to cultural activities, charity organizations and promoting

sports activities.

4. AAC is committed to the principles of Total Quality Management and continual

improvement. The effectiveness of this is measured by conducting regular Internal

Audits and in Monthly and Quarterly Performance Reviews. Specific Quality Objectives

set by the company are regularly monitored and reviewed in these meetings.

Identity of key executives: Mr. Michel I. Ayat, CEO

Mr. Sampath Kumar, Director – Finance & Accounts

Mr. Felix N.D. Welch, Director – Sales & Marketing

Mr. M.K.Rajkumar, Director – After sales & Trading

Competitive strategies: Provide excellent after sales service and build customer

relationship

Organizational structures: Clear hierarchy structure with each function having separate

head and all the functional heads reporting to CEO.

Investment plans: Al Rostamani started the expanded service centre. This marks the first

time a UAE distributor will launch a 24/7 servicing facility and the expansion has

necessitated an increase to a total of 60 service bays with vehicle lifts, as well as 123

body shop repair bays. At full capacity the facility will be able to process 300 car

services per day. The physical site infrastructure now covers some 350,000 square feet

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and is believed to be the largest single site vehicle service and body repair facility

currently operating for Nissan vehicles in the Middle East.

Key success factors: The strength of the product and the management.

1. Sales

Kia currently has 5.8% market share in the UAE. Kia's sales in the UAE fell by 35% y-o-

y to around 8,000 cars in 2009, taking its revenues down by 40% y-o-y. Kia Motors

launched four new models in 2010, which is really exceptional in global auto industry.

All these new models were applauded with great appreciation by the market, for its

design, and advanced technology. Kia motors closed the year 2010 with a growth of 26

per cent. Earlier in the year 2010 it rolled out the new Sorento SUV and in March it

launched the higher end Cadenza sedan. Both are aimed at particularly strong vehicle

segments for the UAE, as the SUV and premium markets are traditionally strong and

usually avoid the issue of credit by targeting more affluent consumers. Sales across the

UAE of Kia cars for the first seven months of the year 2011 increased 20 per cent in the

UAE, compared with the same period last year, taking market share from industry

heavyweights Toyota and Nissan

2. Customers

Customer profiles: Low and medium income group

3. Products

Breadth and depth of the product range: Low cost saloon cars starting from 1.1 litre

engine Kia Piccanto to the Kia Cadenza which is 3.5 litre engine. It has SUV‘s like Kia

Sportage starting from 2.0 litre engine and MPV‘s like Kia Carens.

New product policies: Great focus on design and styling.

New product introduction: KIA Cadenza.


Sales promotions: Mainly focus on value added packages in the form of free services etc.

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Types of distribution network used: 10 showrooms are available in all the emirates of

UAE.

Dealer objectives: Retaining customers by providing them high quality vehicles at

excellent value and backing this effort with a strong after sales support has been the main

objective of the company.

Size, calibre and experience of the sales force: Separate sales staff for showroom, fleet

and re-export sales is available.

Stock levels: Average inventory levels of 2 months.

After-sales service capabilities: 12 service facilities are there all across UAE.

6. Price

List prices and discounts by product and customer type: Prices and e-catalogues are

available.

7. Finance

Depth of financial resources: Al Majid Motors is a part of Juma Al Majid group and is

financially very strong.

8. Management

Philosophy and culture: Retaining customers by providing them high quality vehicles at

excellent value and backing this effort with a strong after sales support has been the

hallmark of the company.

Identity of key executives: Mohammad Khader, General Manager.

Competitive strategies: Aggressive on youthful, sporty yet cost conscious segment of

customers.

Investment plans: Al Majid Motors will invest almost Dh150 million in new showrooms

to expand in the country and increase customer base. A sales, service, spare parts and

storage centre in Abu Dhabi's Musaffah area will be opened. With an investment of

Dh110 million, the facility will accommodate almost 2,700 vehicles. Additionally, its

showroom in Dubai will be expanded by the end of May with an investment of Dh6

million. Another major investment will be made in Ras Al Khaimah, where a new Dh29

million sales, service, spare part and storage centre will be set up. Key success factors:

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Al Majid Motors has always laid stress on first grade customer service and this has been

the true reason behind the company's success.

1. Sales

Sales in the UAE fell from 13,915 units in 2009 to 11,156 in 2010. But the majority of

this fall was attributed to the discontinuation of the Hummer brand, which was very

popular in the UAE. In the UAE, General Motors has three dealers, Bin Hamoodah in

Abu Dhabi, Al Ghandi Auto and Liberty Automobiles in Dubai. Top selling models in

the UAE are the Chevrolet Tahoe, followed by the GMC Yukon, the Chevrolet Caprice,

GMC Sierra and Chevrolet Cruze. After posting the best sales month of the year in

December, GM‘s dealers in the Middle East reported total sales of 139,431 vehicles for

2011 - up 13 percent compared to 2010.

2. Customers

Customer profiles: GMC products are mainly bought by medium and high income group

customers whereas Chevrolet saloon cars are preferred by low and medium income

young buyers.

3. Products

Breadth and depth of the product range: Both GMC and Chevrolet have SUV‘s.

Chevrolet‘s SUV‘s start from 2.4 L engine Captiva and range goes upto 5.3 L engine

Suburban. Chevrolet also has saloon cars ranging from Chevrolet Spark to Chevrolet

Caprice. GMC has only SUV‘s ranging from GMC Terrain to GMC Yukon.

New product introduction: The GMC Acadia Denali, Chevrolet Captiva.


Product literature: E-catalogues are available for the entire product range.

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Sales promotions: Focus on short term sales promotions like installment holiday for 3

months.


Size, calibre and experience of the sales force: Sales staff is experienced.

6. Price

List prices and discounts by product and customer type

7. Finance

Depth of financial resources: All the three groups are financially strong.

8. Management

Al Ghandi Auto

Al Ghandi Auto emerged with the vision of the United Arab Emirates to provide a

constantly evolving market with world class automotive products and services. Al Ghandi

Auto has grown to become one of largest automotive industry organizations in the Middle

East region comprising of 5 divisions, offering Automotive, Industrial machinery and

equipment, car rental & leasing services, and vehicle testing facilities. They employ over

800 highly trained personnel, in 6 locations across the UAE.

Liberty Automobiles

One of the largest GM dealerships in the UAE, Liberty Automobiles Co. was

established in 1976, as an authorized General Motors dealer for Cadillac, Chevrolet and

AC Delco. Over the years, Liberty Automobiles Co. has played an integral part in the

growth of General Motors, and emerged as one of the leading distributors in the entire

region. In February 2002, Liberty was appointed by General Motors as authorized

distributor for Opel in Dubai, Sharjah and the Northern Emirates. The Liberty dealership in

Sharjah built the world‘s largest GM showroom in 2004. Liberty Automobiles Company

was appointed the authorized distributor for the prestigious Hummer brand in November

2005. Liberty Abu Dhabi Automobiles Co. – the partner company of Liberty Automobiles

Co., was established in Abu Dhabi in November 2005 as the authorized dealer of Cadillac

and Hummer brands in Abu Dhabi and Al Ain, where the two brands are supported by

large Showrooms, Service and Parts facilities.

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Bin Hamoodah

Bin Hamoodah Trading, part of the Bin Hamoodah Group of Companies, was

established in Abu Dhabi in 1967 and has grown into one of the most advanced and

respected business groups in UAE, representing a number of international agencies and

joint ventures both within UAE and abroad. Bin Hamoodah Automotive offers a wealth of

variety to the automotive consumer in UAE. At the commencement of new millennium,

BHA acquired a new brand of General Motors ‗Chevrolet‘ to widen the customer choice

catering for potential customers providing satisfaction to everyone‘s taste and purchasing

power. Bin Hamoodah Automotive‘s staffs are multi-cultural, experienced, professional

and creative. The company is headed by a highly experienced General Manager who

always works towards sustaining and surpassing work performance levels. The

professional management team of departmental managers is enthusiastic, positive in their

attitude and develops a co-operative and healthy working environment in which staff work

together to achieve company goals and objectives.

1. Sales

Gargash Enterprises, the official distributor of Mercedes-Benz in Dubai and

Northern Emirates region, revealed a 10 percent increase in new car sales for the year 2010

compared with 2009. This rise was spurred on primarily by sales of the new E-Class and

face lifted S-Class. The exclusive distributor for Mercedes-Benz in Abu Dhabi and Al Ain,

Emirates Motor Company is one of the Middle East's leading distributors for Mercedes-

Benz and owns the largest Mercedes-Benz facility in the world. Mercedes‘ sales for the

year 2011 were almost as impressive as the sales for 2008, the best year yet. In 2011,

nearly 17,000 units were sold overall in the region. Dubai and Abu Dhabi retained their

market position accounting for 39% of Middle East sales overall.

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2. Customers

Customer profiles: High income customers buying for the esteem value of product.

3. Products

Breadth and depth of the product range: Product range varies across Bus, trucks, vans,

SUV‘s and saloon cars.

Comparative product performance levels: Considered to be the best in class with cutting

edge German technology.

New product introduction: The new models launched in 2011 included SLK Roadster, C-

Coupe, CLS and C-Class Facelift.


Product literature: High quality product catalogues are available

Sales promotions: sales promotions are focused on product associations which reflect the

esteem value of the brand


Types of distribution network used: Gargash has 5 showrooms and 6 workshops across

Dubai, Sharjah and the Northern Emirates.

Size, calibre and experience of the sales force: Experienced and qualified sales staff is

available.

Stock levels: 2 months stock levels are generally maintained.

6. Price

List prices and discounts by product and customer type: Prices are prominently displayed

in the showrooms.

7. Finance

Depth of financial resources; Both Gargash Motors and Emirates motor company are

financially very strong

8. Management

Objectives (short and long term): Established in 1958, Gargash is the authorized

distributor of Mercedes-Benz in Dubai, Sharjah, & Northern Emirates. Today the

company employs over 1000 people, and has become one of the largest brands driving

the Mercedes-Benz business and service.

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Emirates Motor Company (EMC) has been the authorized general distributor for

Mercedes-Benz in Abu Dhabi and Al Ain since 1962. It is a part of Al Fahim group

which was established in 1958 by the late Abdul Jalil Al Fahim. Al Fahim Group is the

oldest and one of the largest business groups in Abu Dhabi and in the UAE. From the

beginning, dedicated customer service has played a major role in the company‘s success.

EMC was also the first Mercedes-Benz distributor in the Middle East to be awarded ISO

Certification in 1998 and is currently certified to the ISO 9001:2008 standards. The

company‘s vision is to build a dynamic organization which maximizes the full potential

of the employees to provide the best service for all our customers. The mission is to have

a customer focused organization with a professional and motivated workforce to deliver

superior services with a passion to exceed customers' expectations.

Philosophy and culture: Offering matchless quality with unrivalled service.

Identity of key executives: Mr. Abdul Jabbar Gargash, Executive Director, Gargash

Enterprises.

Competitive strategies: Innovative customer-oriented marketing programs.

Investment plans: Spanning a total area of one million square feet, the new Emirates

Motor Company (EMC) headquarters, the world‘s largest Mercedes-Benz facility,

features a 4,382-sq metre showroom, 20,873-sq metre service centre with over 250 work-

bays, 7,196-sq metre for spare parts, a multi-story parking lot and staff accommodation.

Key success factors: The ideology to provide best quality with excellent service facilities

has been the main reasons behind the success.

1. Sales

German carmaker BMW recorded an 18 per cent sales increase in 2010 in the Middle

East, selling a record 17,119 cars in the region. The UAE remained the biggest market,

accounting for 47 per cent of BMW Group Middle East‘s 2011 sales. Abu Dhabi was the

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highest volume selling market, with a 23 per cent growth and 4,436 cars sold while

Dubai also witnessed an increase of 23 per cent with 4,395 cars sold. BMW is

represented by AGMC motors in Dubai and by Abu Dhabi Motors in Abu Dhabi.

2. Customers

Customer profiles: High income group looking for esteem value with sporty looks.

3. Products

Breadth and depth of the product range: Saloon cars and SUV‘s like BMW 7 series,

BMW 5 series The other best selling BMW models included the X6 Sports Activity

Coupé (2,620 cars), X5 Sports Activity Vehicle (2,510 cars) and the BMW 3 Series

(2,033 cars).

New product introduction: The all-new BMW 3 Series and the BMW 6 Series Gran

Coupe.


Product literature: High quality product catalogues are available.


Size, calibre and experience of the sales force: Experienced and qualified staff is

available

Stock levels: Sufficient inventory levels are maintained.

6. Price

List prices and discounts by product and customer type: Separate price for fleet

customers.

7. Finance

Depth of financial resources: Both AGMC and Abudhabi Motors are financially strong.

8. Management

AGMC

For over 35 years, AGMC has delivered premium automotive products to

customers as the exclusive importer for BMW in Dubai, Sharjah and the Northern

Emirates. It has been a long and rewarding journey which began in Sharjah in 1976 when

the first AGMC showroom was opened. It displayed only three cars and featured three

workshop bays. At that time they employed ten members of staff while they sold just 50

vehicles in a year. In 1996 they moved headquarters to their flagship showroom on Dubai‘s

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Sheikh Zayed Road. With a total area of 33,000 square metres, the complex accommodates

state-of-the-art sales and after-sales facilities, showrooms for BMW, MINI, Rolls-Royce

and Certified Pre-Owned vehicles as well as the BMW Regional Training Centre. Their

modern facilities in Ras Al Khaimah opened in May 2002 and can accommodate 10 cars as

well as a service centre with four bays. The Sharjah showroom was graciously inaugurated

in April 2004 by His Highness Doctor Sheikh Sultan Bin Mohammad Al Qasimi, Member

of the Supreme Council and Ruler of Sharjah. It features modern facilities for new and

Certified Pre-Owned car sales for BMW, MINI and Rolls-Royce as well as a service centre

boasting 42 work bays, and is testimony to the BMW premium brand strategy. AGMC‘s

vision for the future is to be the market leader of the premium automotive industry.

Abudhabi Motors

Abu Dhabi Motors is the exclusive importer for BMW, MINI, BMW ALPINA and

Rolls-Royce in Abu Dhabi and Al Ain. The company was founded on 25th May 1985 by

Sheikh Mohammed Bin Butti Al Hamid in Umm Al-Nar in a small showroom and

workshop employing 24 people. Growth was steady for the first 10 years but with the onset

of the millennium, the company changed its strategy and focus.

This change brought about dramatic growth and today, Abu Dhabi Motors employs

more than 420 people. The company now boasts fourteen facilities within the emirates;

five showrooms, three workshops, three bodyshops, one Pre-Delivery Inspection centre

and two car storage warehouses. Abu Dhabi Motors is the importer which offers the

highest options in its cars in the Middle East and particular emphasis is given to BMW's

'Individual' programme which allows customers to select unique colours, luxury interior

trim combinations and accessories for their BMW vehicle. In addition, high performance

derivatives from the BMW range are available to customers.

Abu Dhabi Motors is the BMW Importer with the highest BMW percentage

segment share in the Middle East. Abu Dhabi Motors has achieved the highest recognition

as it was named among the world‘s top three BMW dealers and importers at the BMW

Group‘s Excellence in Sales Award Ceremony, held recently in Munich.

Investment plans: AGMC is in the process of opening a new showroom in Fujairah. This

new showroom will be opened in the second half of 2012. In 2012, AGMC is opening a

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new facility at Deira which will have BMW Premium Selection and Fast Lane service with

14 work Bays.

Key success factors: Excellent customers‘ ownership experience through innovative

customer care practices supported by a team of motivated professionals.

1. Sales

The last two years have been a critical test period for the automobile sector in the UAE.

And to survive the harsh conditions, automobile dealers have had to reinvent the way

they marketed their vehicle brands. Every brand worth its name has taken a jolt and only

the tough have survived. Mitsubishi continues to carve a niche for itself during these

trying times and Al Habtoor Motors the official dealer of the brand in the UAE has

achieved an impressive growth rate. Mitsubishi‘s market share grew by an impressive

25% in 2009 and was the only Japanese manufacturer that achieved such a growth rate.

Over the last two years, Al Habtoor Motors has moved from third to second position in

the UAE for achieving substantial growth in vehicle sales. Al Habtoor Motors continues

to build on its established success by being the ‗Number One Dealer for Mitsubishi in the

Middle East‘ for the seventh year in a row. Al Habtoor Motors sells an average of 45,000

Mitsubishi cars annually. In 2008, when the market was at its peak, the company sold

around 55,000 cars.

2. Customers

Customer profiles: Medium income group.

Buying motives: Mitsubishi Pajero is a popular SUV.

Patterns of usage: Mostly within city drive.

3. Products

Breadth and depth of the product range: Saloon cars, SUV and small Pick-up trucks are

available.

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Comparative product performance levels: Products are generally rated good on

performance.

New product introduction: Mitsubishi held its GCC launch event for their all-new 2011

ASX sub-compact crossover at the Dubai Autodrome racetrack recently.


Product literature: Product catalogues and e-catalogues are available.

Sales promotions: Very aggressive on promotions. Mitsubishi comes with promotions

like special finance deals like zero deposit, free insurance, free service contract and free

registration. Mr. Roger Ghosn Marketing Manager of Al Habtoor Motors said that their

promotions are a reflection of their efforts to transform customers buying experience to a

more pleasurable and memorable one.


Size, calibre and experience of the sales force: Experienced and qualified sales staff is

available.

Customer service philosophy: We strive, you drive.

6. Price

List prices and discounts by product and customer type: Separate price list for

showroom, fleet and re-export customers is available.

7. Finance

Depth of financial resources: Al Habtoor Motors is diversified and financially strong

group.

8. Management

The mission is to ensure that every customer gets only the best of services to live upto

their promise 'we strive, you drive'. The vision is excellence, innovation and technical

expertise in automotive industry. Al Habtoor Motor's growth as a company is the result

of continuously demonstrating good corporate governance and an approach to customer

service satisfaction. Al Habtoor Motors is among the leading Automobile Distributors in

the UAE. As a company, it was established in 1983 and has been driven by

professionalism, quality and the highest standards of customer service ever since. Today

Al Habtoor Motors is almost synonymous with Mitsubishi and their vast range of

saloons, 4x4s and commercial vehicles. Other automobile marquees in the Al Habtoor

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Stable include the majestic Bentley, the exquisite Aston Martin and the very powerful

Bugatti. The offerings in the commercial vehicle segment include the Fuso and Canter

trucks and luxurious Temsa coaches. Al Habtoor Motors has experienced steady growth

since inception and has a well established network of seven showrooms, eight service

centres and twelve parts centres covering the entire United Arab Emirates. The company

has substantially invested in the Al Habtoor Centre for Genuine Parts & Services in the

Dubai Investment Park, Jebel Ali. This two hundred working bay, state-of-the-art facility

boasts the latest in diagnostic equipment and offers the very best in vehicle service. As

the company grows from strength to strength, more expansions are underway to add up

to the existing showroom, parts and service facilities.

1. Sales

Honda is a very strong brand in UAE. It is represented by Trading Enterprises in entire

UAE.

2. Customers

Customer profiles: Medium income group customers.

Buying motives: Excellent styling and customers looking for high performance.

Patterns of usage: Mainly city usage.

3. Products

Breadth and depth of the product range: Saloon cars from Honda Jazz to Honda Accord

which is 3.5 L engine capacity sedan. Four wheel drive vehicles range from Honda CRV

to Honda Pilot

Comparative product performance levels: High performance products.

New product policies: Focused on product performance and styling.


Product literature: Product catalogues are available.

Sales promotions: Sales promotions are mostly pertaining to providing easy finance

options for consumers.

122


Types of distribution network used: Al-Futtaim Honda is supported by a network of 10

modern showrooms and 11 aftersales facilities located across the UAE. The flagship

Honda Dubai Festival City showroom was officially confirmed by Honda as the largest

Honda showroom in the world.

Dealer objectives: To ensure that we continue to be a premier supplier of automotive

products and services thereby supporting our "excellence in customer service".

Sales force customer coverage: Sales force adequately covers geographically all the

emirates of UAE.

Stock levels: average 2 months stock levels are maintained.

6. Price

List prices and discounts by product and customer type: For fleet customers, separate

price list is available.

7. Finance

Depth of financial resources: Trading Enterprises is owned by Al-Futtaim group which is

financially very strong.

8. Management

Trading Enterprises is owned by Al-Futtaim Group. In 1977, Trading Enterprises was

awarded the official distributorship rights for Honda in the UAE. Since those early days,

sales of the Honda premium range of technically advanced cars have grown steadily and

Trading Enterprises is now recognized as one of the largest independent Honda

distribution companies in the world. Trading Enterprises currently employs

approximately 1200 highly skilled employees of 22 varying nationalities. To further

build capability in the staff and to enhance customer satisfaction levels, an intensive

customer service training programme continued for all staff at all levels during 2008,

solidifying the company's endeavour to be recognized as the premier supplier of

automotive products and services.

123

1. Sales

Mazda in UAE is represented by Galadari Automobiles. Galadari Group over the past

four decades has grown to become one of the most respected business organizations in

the U.A.E. The Japanese manufacturer has increased its market share in 2011. "We are

also looking to increase it by a further 15 to 20 per cent in 2012. We have an aggressive

plan, including the opening of our new showroom on Shaikh Zayed Road in April 2012,"

said Axel Dreyer, General Manager of Galadari Automobiles, sole distributor of Mazda.

2. Customers

Customer profiles: Medium income group customers.

Patterns of usage: In city usage.

Identity and image among buyers: Sporty and stylish cars.

3. Products

Breadth and depth of the product range: Saloon cars from Mazda 2 to Mazda 6. Only one

crossover utility vehicle, Mazda CX 9, is available.

Comparative product performance levels: Product performance levels are high.

New product introduction: Launch of 2011 Mazda2 in the UAE represents a strategically

important step for Mazda, signaling the brand's entry into the small car segment.


Product literature: product leaflets and catalogues are available.

Sales promotions: Sales promotions focus on targeting younger segment of the

population.


Types of distribution network used: Galadari Automobiles has seven showrooms and six

service centres across the UAE.

Sales force customer coverage: Customer coverage is adequate.

Stock levels: Sufficient inventory of vehicles is maintained.

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After-sales service capabilities: With six service centres across all the emirates, the after

sales service is adequately covered.

6. Price

List prices and discounts by product and customer type: Special prices are offered to fleet

customers.

7. Finance

Depth of financial resources: Galadari automobiles is a part of Galadari Group which is

highly diversified and is financially strong.

8. Management

Objectives (short and long term): Galadari Automobiles enjoys a pioneer status in UAE

and has earned goodwill and trust of millions of satisfied customers. It holds strongly to

its vision of achieving growth and success through customer satisfaction and ethical

business practices. Galadari Automobiles envisions being a leading, professionally

managed organization providing world-class automotive products and services in UAE.

Identity of key executives: Axel Dreyer, General Manager.

Competitive strategies: Quality after-sales support and servicing to ensure client

satisfaction and long-term relationship with customers.

Investment plans: New showroom on Sheikh Zayed road is slated to be opened in 2012.

125

5.3 COMPETITIVE STRENGTH ASSESSMENT

Table 5.1

Unweighted Competitive Strength Assessment

Rating Scale: 1= Very Weak, 10= Very Strong

Source: Researcher‘s Survey

Key Strength

Measure

TO

YO

TA

HO

ND

A

GM

FO

RD

NIS

SA

N

MIT

SU

BIS

HI

ME

RC

ED

ES

BE

NZ

BM

W

KIA

HY

UN

DA

I

Product Portfolio 9 6 7 7 8 8 8 8 8 8

Reputation/

Image 9 8 7 6 8 8 9 8 7 7

Sales Promotion 8 8 8 7 7 8 7 7 7 8

Advertising

Effectiveness 7 8 7 7 7 8 8 7 7 7

Financial Strength 9 9 7 8 8 8 8 8 7 7

Distribution 9 8 7 7 8 8 8 7 7 7

Ability To

Compete On Price 8 7 8 7 8 8 7 7 8 8

After Sales Service 9 8 7 7 8 8 8 7 7 7

Unweighted

Overall Strength

Rating

8.5 7.75 7.25 7 7.75 8 7.9 7.4 7.25 7.4

126

Table 5.2

Weighted Competitive Strength Assessment

Source: Researcher‘s Survey

Analysis

It can be inferred from the table no 5.2 that Toyota brand is the strongest competitor.

However, while the relative strengths of each competing enterprise are clearly visible in

table 5.1, there is no indication of the relative importance of each of the key success

Key Strength

Measure

WE

IGH

T

TO

YO

TA

HO

ND

A

GM

FO

RD

NIS

SA

N

MIT

SU

BIS

HI

ME

RC

ED

ES

BE

NZ

BM

W

KIA

HY

UN

DA

I

Product

Portfolio 0.3 2.7 1.8 2.1 2.1 2.4 2.4 2.4 2.4 2.4 2.4

Reputation/

Image 0.15 1.35 1.2 1.05 0.9 1.2 1.2 1.35 1.2 1.05 1.05

Sales

Promotion 0.1 0.8 0.8 0.8 0.7 0.7 0.8 0.7 0.7 0.7 0.8

Advertising

Effectiveness 0.05 0.35 0.4 0.35 0.35 0.35 0.4 0.4 0.35 0.35 0.35

Financial

Strength 0.05 0.45 0.45 0.35 0.4 0.4 0.4 0.4 0.4 0.35 0.35

Distribution 0.1 0.8 0.7 0.8 0.7 0.8 0.8 0.7 0.7 0.8 0.8

Ability To

Compete On

Price

0.05 0.4 0.35 0.4 0.35 0.4 0.4 0.35 0.35 0.4 0.4

After Sales

Service 0.2 1.8 1.6 1.4 1.4 1.6 1.6 1.6 1.4 1.4 1.4

Weighted

Overall

Strength

Rating

1 8.65 7.3 7.25 6.9 7.85 8 7.9 7.5 7.45 7.55

127

factors. These priorities can be indicated by weights, as in table no. 5.2. From this it is now

evident that Toyota is the market leader, followed by Mitsubishi. These profiles indicate

quite clearly the relative importance of key success factors and the relative strength of each

competitor on each of those factors.

5.4 LINKING COMPETITOR ANALYSIS TO MARKETING STRATEGY

Figure 5.2

Industry Positions

Source: Wilson, M.S. and Gilligan, Collin, Strategic marketing Management, Elsevier

Butterworth, Oxford, dated 2005.

Which competitive marketing strategy a company adopts depends on its industry

position. A firm that dominates a market can adopt one or more of several market leader

strategies. Well-known leaders include Chanel (fragrances), Coca-Cola (soft drinks),

McDonald's (fast food), Komatsu (large construction equipment), Kodak (photographic

film), Lego (construction toys) and Boeing (civil aircraft). It is visible from the above

analysis that Toyota is the market leader in UAE automobile market.

It can take the following strategies

a) Expand the market

b) Protect the current share

Leaders

Challengers

Nichers Followers

Expand the Market

Protect the share

Expand the share

Discount prices

Cheap Goods

Innovate products

Improve services

Advertise heavily

Proliferate the range

Reduce costs

Segment carefully

Use R&D cleverly

Challenge

Conventional

Wisdom

128

c) Expand the share

Market challengers are runner-up companies that aggressively attack competitors to

get more market share. For example, Pepsi challenges Coke and Airbus challenges Boeing.

The challenger might attack the market leader, other firms of its own size, or smaller local

and regional competitors. From the above analysis it can be commented that Mitsubishi is

the market challenger. To consolidate its share, it can follow

a) Discount or cut prices

b) Innovate distribution strategy

c) Improve its services

d) Advertise heavily

e) Reduce its costs

Home runner-up firms will choose to follow rather than challenge the market leader.

Firms using market follower strategies seek stable market shares and profit by following

competitors' product offers, prices and marketing programmes. From the above analysis it

can be inferred that Nissan, Honda are market followers in UAE automobile market.

Smaller firms in a market, or even larger firms that lack established positions, often

adopt market nicher strategies. They specialize in serving market niches that large

competitors overlook or ignore. Market nichers avoid direct confrontations with the big

companies by specializing along market, customer, product or marketing-mix lines.

Through clever niching, low-share firms in an industry can be as profitable as their large

competitors. In the UAE automobile market Ford, BMW follow market niche strategy.

5.5 COMPANY STRATEGY FOR THE MAJOR BRANDS IN UAE

The Company Strategy for the major brands have been studied as mentioned below

General Motors Company (GM)

In February 2010, Dubai-based General Motors Company (GM) dealer Liberty

Automobiles revealed its new growth strategy, which will focus on improving all aspects

of customer service. The three year 'service-centric‘ strategy will include measures such as

longer opening hours, improving the efficiency of call centres and developing new

‗customized solutions‘ based on customer feedback. According to Sheikh Khalid Bin

129

Abdul Aziz Al Qasmi, chairman of the dealer‘s holding company, Liberty Investment

Company, future industry growth will be driven by service.

The service strategy will support GM's new model launches in the UAE, which are

also expected to contribute to a better performance. On exiting bankruptcy, GM revealed

that part of its turnaround strategy for the whole company would focus on improving its

relations with the car-buying public, as well as its product range. This was echoed by

Sheikh Khalid Bin Abdul Aziz Al Qasmi, who said the downturn had given the company a

chance to 'analyze our strategies and goals' and this had 'confirmed that service is the key

differentiating factor'. Terry Johnsson, president of GM Middle East, believes that one

strategy for the company is to revisit its practice of allocating dealerships by brand and

encourage the consolidation of brands. The first dealers to oblige are Al Yousuf Motors

and National Auto, the respective Chevrolet and GM dealers for Dubai and Ras Al

Khaimah, which have joined to form Al Ghandi Motors. The consolidation strategy is

aimed at reducing operating costs and creating more choice for the customer.

GM is also planning to tap into a growing trend for customization of cars, with a

particular focus on attracting younger drivers.

Nissan

Japanese car maker Nissan is targeting the Middle East, and the Gulf in particular,

for growth as it tries to wipe out debts accrued in 2009. The firm intends to double its

market share in the Middle East. Chief executive Carlos Ghosn has said that he keeps a

close eye on the Gulf market. He noted that Nissan had upgraded the offerings on its Patrol

SUV after receiving negative feedback about the vehicle‘s previous frugality. Nissan‘s

Dubai-based dealer Arabian Automobiles is running an expansion programme for 2007-

2010 aimed at its sales and servicing facilities in Dubai and the northern emirates. The

AED500mn (USSl36mn) project will see not only the construction of the company‘s

largest logistics base, but also the opening of a new showroom and refurbishment of

existing centres. This comes soon after the expansion of two of its parts centres to five

times their original size, in order to make genuine parts more widely available for both new

and existing Nissan Motor vehicles. AED350mn of the total investment will be allocated to

the logistics centre, based in the Dubai Industrial City. The centre will have the capacity to

house 12,000 cars. Apart from this three showrooms in Ajman, Ras Al Khaimah, and

130

Umm A1 Quwain will be refurbished. Arabian Automobiles general manager, Michel

Ayat, has said that ―offering good after-sales service is as important as selling new cars‖.

This is a sentiment echoed throughout the Middle East‘s industry with a growing focus on

promoting the use of genuine parts and servicing and was partly behind Arabian

Automobiles‘ expansion of its two parts centres.

Mazda

Japanese carmaker Mazda Motor has announced an expansion of its facilities in the

UAE, based on its expectations for average annual sales growth of l5-20% over the next

three to five years. According to exclusive dealer Galadari Automobiles, the company has

invested in adding to and upgrading its existing facilities to give a total of seven

showrooms and six service centres throughout the UAE, in addition to warehouses.

The UAE automotive market is traditionally credit-oriented, but with restrictions on

loans, customers used cash for cheaper cars. This suggests that the Mazda3 and the

forthcoming subcompact, which could be the Mazda2 that has just entered production,

stand to benefit from such a trend. Mazda is one of the carmakers that have set up

financing units in order to overcome the issue of credit restrictions. Galadari has tied up

with major banks and financial institutions to help provide loans to Mazda buyers, which

will be offered at low interest rates and with zero down payments.

Toyota

Japan auto giant Toyota says it will bounce back in 2012 after global sales were

battered by the dual impact of Thai floods and the Japanese earthquake. The company,

which relinquished its title as the world's biggest in global vehicle sales for the first half of

this year, is targeting record global sales of 8.48 million vehicles in 2012 and 8.95 million

vehicles in 2013, it said in a statement. Meanwhile, Al-Futtaim Motors, dealer of Toyota in

the UAE, is aiming for 25 per cent growth in sales in 2012. "We are looking at continued

growth for next year. ―Our sales growth is going to be around 25 per cent," said Andrew

Squires, General Manager of National Sales Operations at Al-Futtaim Motors. "This is

brought by the continued product launches‖, he added.

BMW

BMW Middle East said last year was the most successful year in the Group‘s

history in terms of regional sales as the German automobile company sales jumped by nine

131

per cent in the region. The company reported record sales for both new and pre-used BMW

cars in the region for 2011 and said the UAE contributed 47 per cent of the regional sales

across 14 markets in the Middle East. Three new models will be launched in the first half

of 2012, Dr Joerg Breuer, managing director, BMW Group Middle East, told reporters at a

news conference on Tuesday. ―The Middle East is enjoying robust growth across all sectors

of the automotive industry, with the luxury segment in particular growing substantially.

These market factors coupled with the commitment of our importer partners and the launch

of seven beautifully-designed and technologically-advanced new models during 2011 have

helped drive our 9 per cent sales growth,‖ Dr Breuer said. The group is very keen to

expand its reach in the Middle East and is working on two directions with more focus on

existing and growing markets and also looking to explore new markets. ―We have a

strategy that goes to two directions. One side we are further exploiting potential in existing

markets. For example in UAE our focus is on Dubai and Abu Dhabi. We have been

investing over $100 million this year into facilities and equipment and we are also opening

new facilities in Fujairah next year,‖ he added.

Mercedes Benz

Mercedes-Benz Middle East and Levant has announced regional sales during its

125th Anniversary year in 2011 as the second best ever achieved, celebrating record

performances and touching highs last experienced in 2008. Revealing the results to media

at a press conference, the luxury German automotive manufacturer also shared a strategy to

drive the momentum of 2011 sales, branding 2012 'Year of the SUV'.

Mercedes-Benz' impressive roster of new models launched in 2011- including SLK

Roadster, C-Coupe, CLS and C-Class Facelift - contributed to the overwhelmingly positive

sales, with nearly 17,000 units sold overall in the region. It was a best year ever for

Mercedes-Benz SUVs too, with year on year (YOY) sales up 16% across all models in the

range. Highlighting this achievement was Mercedes-Benz' "S-Class of SUVs" GL-Class,

the flagship model growing 93% versus 2010. Frank Bernthaler, Director, Sales and

Marketing, Mercedes-Benz Cars, Middle East & Levant said, "Driven by Mercedes-Benz

'Best or Nothing' mantra throughout our 125th anniversary, we are delighted to

congratulate our regional distributors' best ever performances, and celebrate a second best

year ever for us in the Middle East‖. With a regional strategy, unveiled by Bernthaler,

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focusing on SUVs and the company's AMG sports car division to drive sales to new

heights, the March launch of Mercedes-Benz new M-Class unveiled at the Dubai

International Motor Show 2011 is marked as a key to growing market share for the

company, and will be bolstered by new GLK- and top of the range GL-Class model

launches in later months. Bernthaler also stressed the importance of the company's refined

Proven Exclusivity pre-owned vehicle offering. Available across the entire Mercedes-Benz

Middle East and Levant general distributor network with a strong online and showroom

presence, Proven Exclusivity sales grew by 22% last year and represents almost a fifth of

the company's total regional vehicle sales.

Mitsubishi

Mitsubishi Motors is looking at stepping up the revitalization plan to a new stage in

which the company will build a base for sustainable growth, through a basic policy of

"bolstering strengths and securing steady profits". A part of this strategy is to provide

competitive products in its "focus" markets and increase unit volumes. The other areas of

focus are

a) Ensure steady profits through cost reductions and improved profitability in after-

sales.

b) Improve efficiency of its global production operations in line with its sales strategy.

c) R&D for leading-edge environmental technology.

d) Development of global products that reflect both financial and environmental

responsibility.

e) Focus on minicars and small cars, medium-sized cars, and SUVs.

In the Middle East, apart from tall the above, the company will focus to integrate

all functions - sales, marketing, parts and after-sales service and strengthen comprehensive

sales support.

133

REFERENCES

Cespeds, F.V. and Piercy, N.F. (1996), ‗Implementing Marketing Strategy‘, Journal

of Marketing Management, Vol. 12, pp. 135–60.

Doyle, P. (2002), Marketing Management and Strategy, London: Prentice-Hall, 3rd

edition.

Fifield, P. (1998), Marketing Strategy, Oxford: Butterworth-Heinemann, 2nd edition.

Kotler, Philip (2008), Marketing Management, PHI Pvt. Ltd, New Delhi.

Porter, M.E. (1980), Competitive Strategy, Free Press, New York.

Wilson, M.S. and Gilligan, Collin (2005), Strategic marketing Management,

Elsevier Butterworth, Oxford.

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