Interview with Stefan Mecha, Managing Director, Volkswagen Middle East
Another in our series of interviews with senior car guys about the state of the industry as we head into 2012
By Shahzad Sheikh
Q. Whilst initial expectations for 2011 were optimistic, it appears to have been a case of a stalled recovery with political unrest across the region, a natural disaster in Japan severely impacting the car industry, and fears of a double dip recession causing buyers to put off purchases. Now in the final quarter, do you find things are better, worst or about what you expected for the year?
2011 has been a year of transition for Volkswagen in the Middle East. We have enjoyed at 17% growth year-to-date compared to 2010 and we have outpaced the total market growth.
This is mainly due to a number of new products that we have launched including the New Touareg and the All-New Jetta, which we launched in May. The last quarter for 2011 is on pace to meet our sales target creating a platform for 2012 where we will be launching a number of new models from our sedan category, including the Passat and the Polo Sedan.
Q. What changes in strategy, if any, did you have to employ to cope with the changing situation and unsettling events of the 2011?
Volkswagen Middle East’s strategy is based on Volkswagen’s long-term strategy for 2018 whereby we aim to be the number one car manufacturer in the world. We see the Middle East as an integral part of this strategy and have set benchmarks for the coming years into our developments in order to achieve this goal. The Middle East continues to be a strong market with huge potential, one where we’re gaining market share, and we want to ensure we satisfy our customers’ expectations as we continue with the developments for 2018.
Q. In the retail environment in the UAE what have been the major developments this year, particularly in light of the new finance rules requirement buyers to have a minimum 20% deposit on new car financing?
Our dealer partners Al Nabooda in Dubai and Ali & Sons in Abu Dhabi respectively, are working in cooperation with their partnering banks and are coping extremely well with this current situation. The customer is our main focus and we ensure their needs stay at the top of our agenda and that we make sure accurate finance information is available to them support them. Overall for Volkswagen, the new regulation has only had a minor impact on us.
Q. Has there been any apparent shift in the demands, needs and requirements of customers? Are they buying more used cars, are they chasing more incentives, are they negotiating more, are they playing hard to get?
Volkswagen has seen a trend towards the importance of fuel efficiency and consumption among our customers. The importance of the environment is a growing concern in the region, and at Volkswagen we have the technology to produce fuel efficient cars; as well as having the innovation to create alternative methods of fuel, including Compressed Natural Gas (CNG). This is a key focus for Volkswagen in the coming years bringing more alternative fuel cars to the region.
Q. Is new product still helping you to get customers into the showrooms? New products are always a draw to attract customers into our showrooms. At Volkswagen we ensure that we continuously develop our technology and innovation within our models, so that they exceed the expectations our customers have grown to expect from our cars.
This year we have also taken our models to the people of the region embarking on a “Volkswagen Roadshow” that will take place in 13 cities, in nine countries over a nine month period. We want to bring Volkswagen to the people enabling them test drive our cars at their local malls, and meet their Volkswagen dealer representative to learn more about the products and services we provide.
Q. Have you had to work harder at marketing your products and brand this year? What’s been the most effective way to deploy your advertising spend this year?
The best example I can give for Volkswagen this year is the campaign for the All-New Jetta. This was a tremendously successful integrated campaign which incorporated all facets of the marketing and communications mix. We executed a social media campaign via our “Be Surprised” page which achieved over 14,000 “likes” in a two month period.
TVC’s and above the line advertising also played an important role ensuring that our new model was effectively communicated to the public. We also held a launch event for the regional media and increased dealer activation, resulting in an increase of a tree times higher unprompted awareness for the All-New Jetta than before the launch.
Q. Looking ahead, what are your realistic expectations for 2012?
For 2012 Volkswagen Middle East expects continued market growth with a significant volume increase. We have a number of exciting projects planned with our partners in the UAE including new showrooms, and we look forward to launching two new products from our Sedan category; the Passat and the Sedan Polo.