In an electric Tesla-driven age, what’s fuelling the auto sector?
In an age where Tesla and disruptive automobile technologies are on the cusp of revolutionizing customer experience and the process of car buying, almost every automobile brand is marketing itself as the disruptor and claiming pole position.
But, in the case of the Arabian Gulf, are all automobile brands’ marketing strategies spot on? Are they striking the right chord with their customers? These questions become all the more important given the fact that the GCC’s automotive sector has been experiencing difficult times over the past two years.
AMEInfo caught up with some of the leading car brands in the region to gauge the pulse of their marketing strategies and how they are pushing sales in the face of the market realities, especially the drop in sales, due to the implementation of VAT.
Right product, right value
Car buying behavior is changing in the Arabian Gulf that is forcing the radical and disruptive change in auto sales and marketing strategy.
Digital buyers are becoming mainstream car buyers with completely new expectations and are increasingly following the omnichannel customer journey: they research, select and buy cars in different ways, and go for the one that offers the right product at the right price.
Car dealers and brands are catching up with the evolving preferences of a potential customer, and therefore, are building a customer-centric ecosystem.
Axel Dreyer, General Manager, Galadari Automobiles Co. Ltd. (LLC), for instance, says, “Due to our fresh model line-up, excellent value for money and reputation as a Japanese Premium Manufacturer, MAZDA in the UAE did very well in 2017 and we are continuing this success during the first five months in 2018. In fact, we have consistently increased our market share; especially our attractive range of SUV cars is attracting a lot of buyers.”
“We are very optimistic about the automotive market development in the UAE as there are continuous investments in the infrastructure from the government. Although the UAE government is having a sophisticated public transport system, I believe that cars will remain to play a vital role in our lives to serve our daily transportation needs,” he adds.
For Ford Middle East and Africa, its bottom line didn’t feel the impact, despite the challenging market conditions.
“The industry has seen trials across the region for the past few years, but despite some of the challenges, both Ford and Lincoln have maintained market share,” Crystal Worthem, Marketing Director, Ford Middle East, and Africa, told AMEInfo.
She also shared the strategy behind this performance.
“These strong performance indicators were mainly driven by having the right products at the right time, continued improvement of the distributor network and retail experience, as well as offering the right solutions for fleet customers.”
For General Motors Middle East too, the marketing strategy revolves around more or less the similar strategy.
“At Chevrolet, our strategy revolves around putting the customer at the center of everything we do, which includes bringing the right product to market and providing our customers with exceptional value via product offerings that combine performance, comfort, and technology in the form of the latest safety and connectivity features, all at a highly competitive price,” Molly Peck, Chief Marketing Officer of General Motors Middle East, tells AMEInfo.
“Chevrolet’s performance in Q1 of 2018 was entirely in line with our expectations, and we are cautiously optimistic of meeting our set targets for 2018.”
While new car sales have been hit hard with the market correction of 2016 and 2017, this, coupled with excess inventory, has made car dealers’ job tougher.
Also, since some markets in the region seeing softening of demand and lower consumer confidence, marketing strategies of most of the automobile brands are focused on promoting added value services and helping customers overcome liquidity issues.
“The current marketing strategy shown by many car dealerships in the UAE, in particular, is to emphasize on promotions which provide an extended warranty, extended service package, registration and insurance for the first year,” Euromonitor senior research manager, Nikola Kosutic, tells AMEInfo.
This serves as a “discount” as those extended packages along with registration and insurance, if purchased outside of the promotion, would often land in the $3000-plus range, with more premium cars seeing this estimate to several times higher.
Another strategy, she adds, is creating a package with zero down-payment, or “down-payment on us”, a scheme where the price of the vehicle is increased by approximately 20%, and then dealership contributes the 20% down-payment.