28 December 2009
According to Wikipedia, the United Arab Emirates (UAE) is a federation of seven emirates situated in the southeast of the Arabian Peninsula. The UAE consists of seven states, termed emirates, which are Abu Dhabi, Dubai, Sharjah, Ajman, Umm al-Quwain, Ras al-Khaimah and Fujairah. The capital and second largest city of the United Arab Emirates is Abu Dhabi. They also buy cars, which is where my interest comes in.
The UAE sales are from 2002 to 2008. In 2002 there were 120,000 vehicles sold in the UAE, and by 2008, that had gone up to 360,000, an increase of 200%. Toyota is the largest brand in the Emirates. It had 30,000 sales (24.5% market share) in 2002 and by ‘08 sold 91,000 (25.3%). Nissan is second with sales going from 34,300 (28.4%) to 54,300 (15.2%). Others were:
3 Mitsubishi 8,400 (7.0%) and 43,600 (12.2%)
4 Honda 10,500 (8.7%) to 23,600 (6.6%)
5 GM 4,500 (3.6%) to 23,400 (6.5%)
6 Hyundai 2,500 (2.1%) to 15,100 (4.2%)
7 Chery new (0%) now 13,900 (3.9%)
8 Kia 1,800 (1.5%) to 10,300 (2.9%)
9 Mazda 3,600 (3%) to 9,000 (2.5%)
10 Mercedes 2,800 (2.3) to 6,800 (1.9%)
The market is strongly Japanese, Toyota top and looking comfortable. Oil rich economies in the Middle East area have vehicle sales growing quickly. Maybe it's time they were a little more transparent reporting the figures as they are increasingly important players in the world's car industry.
The bottom line: I would love to visit the UAE, especially Abu Dhabi.
PS. Sales figures have been modified.
25 December 2009
For reasons unknown to me, getting sales data by brand for the Middle East is not easy. Despite that, I have Saudi Arabian sales from 2001 to 2008 and here is the low down.
In 2001 there were 280,000 vehicles sold in Saudi. By 2008, that had climbed to over 530,000, an increase of 90%. Toyota is the biggest player in the market. It had 105,000 sales (38% market share) in 2001 and by ‘08 sold 189,000 (35.5%). GM has gone from 27,000 (9.6%) to 75,000 (14%). Others in 2008 were:
3 Hyundai 16,000 (5.7%) to 42,000 (7.9%)
4 Nissan 41,000 (14.6%) to 37,2000 (7.0%)
5 Ford 13,500 (4.8%) to 31,700 (6.0%)
6 Isuzu 14,000 (5%) to 31,400 (5.9%)
7 Kia 10,000 (3.5) to 23,500 (4.4%)
8 Mitsubishi 11,000 (4%) to 17,000 (3.2%)
9 Honda 7,000 (2.5%) to 16,500 (3.1%)
10 Daewoo 3,300 (1.2%) to 15,600 (2.9%)
The market is dominated by Japanese, US and Korean brands. Toyota has maintained its strangle hold well and is still very much in the drivers seat. The Koreans are moving up and may pose a bigger threat to the Japanese marques than even the US ones in the long term.
The bottom line: If only this sort of data was more freely available.
PS. Sales Figures have been updated.
22 December 2009
In the US, vehicle plants have been closing as sales fall. There was and is too much over capacity and closing plants, while painful, protects its sustainability long term.
In Europe, it is different. Because the plants across Europe are in different countries, government often fight to make sure no plants are closed within their borders. The UK is an exception, where many car plants have gone to the wall over recent years. However, France has been giving aid to its car makers on the condition that if they close plants, it cannot be in France.
Meanwhile in Germany, the government has not permitted a single vehicle assembly plant to close since the end of World War II. It recently worked with labour unions to interfere in the restructuring of GM Opel. Germany was the one country where GM plants should close. Had the deal to sell Opel to Magna gone through, it's hard to imagine that Opel could have survived long term with the deal the Angela Merkel was stitching together.
There is too much vehicle manufacturing capacity worldwide, much of it in Europe. Europe is supposed to be a free market but the way some European countries behave, the free market in that region is frankly a joke.
The bottom line: Unless capacity is reduced in Europe, especially in Germany and France, profitability will be hard to achieve unless you are making premium brand cars.
13 December 2009
JD Power is a respected survey company who show in this survey just completed that dealers play a major part in the car purchase process. JD Power state: The study finds that more than one in five shoppers who leave a dealership without purchasing a vehicle do so because they experienced poor treatment or dealer performance issues such as pricing games, sales pressure tactics or discourteous treatment. While 43 percent of these buyers ultimately purchased from a different dealer of the same brand, 57 percent decided to purchase from a different brand altogether. For the industry as a whole, this equals a 12 percent loss of retail sales to other brands.
I notice Jaguar is doing well Stateside with basically only two models presently, the XF (up 68% in Nov '09) and XK (up 65%). The quality of the service they get at Jaguar dealers must have a major influence in that success. I have found that if you don't like the service before you buy, try getting satisfaction after the purchase.
The bottom line: If you want good service in the US of A when buying a luxury car, your nearest Jaguar dealer should be your first port of call.
Mercury mainly sell in North America so I know little about them. Except their dealers are doing a good job. Among mass market brands in the latest JD Power Survey, Mercury ranks highest. All seven Ford and GM mass market brands rank above the segment average, which shows that even if the Big Three are struggling, their dealers can still satisfy the new car buyer. If only Chrysler could do better, the three marques dominating the bottom spaces. It can't be easy for their dealers.
On another brand, MINI improves by 16 rank positions from 2008 to rank sixth in 2009, and is the most-improved brand this year. Mitsubishi came well back at last in the survey and the brand's sales are down nearly 50% this year with one month to go!
The bottom line: I know myself from years in the retail sector that good service not only wins customers, they keep coming back for more.
(Car pic Mercury Milan)
03 December 2009
It's funny how car brands are bought with the intention of them becoming profitable, but they just end up costing...and costing. The blame often goes to the brand itself, but rarely to the buyer. GM bought Saab and has lost money ever since. It may cost it much more to divest itself of the marque. BMW bought profitable MG Rover and quickly got it into red ink. It blamed MGR, calling it the English Patient and got rid of most of it in such a way to ensure its demise. The arrogance shown by BMW masked its incompetence in ruining a good company. Ford bought a few brands, calling them its PAG Group. Ford rarely made money on any of them and is now trying to get rid its last PAG brand Volvo.
Now Tata has acquired two of those ex-Ford PAG brands (Jaguar & Land Rover) and everyone expected this to be another failed venture. It didn't help when the world's economy went into a tail spin just after the purchase. Yet while the world markets are still struggling, JLR has suddenly turned losses around and is starting to make money! Even Toyota can't do that presently. How has this happened?
Well the Birmingham Post stated that "JLR posted a profit of £22 million for the September quarter compared with a loss of £49 million in the quarter before, thanks to slimmer operating costs". It then quoted Prof Bailey, who said “Sales figures were boosted by improvements in markets like China and the UK and through sheer hard work by the firm....hats off to JLR for a strong set of results. The firm has got on with the job in hand of developing wonderful products and cutting costs to compete internationally - without much in the way of government support."
So hard work and cost cutting is paying off, and doing so quickly. It's not rocket science, is it?
The bottom line: A lesson for all those companies that bought brands and failed.
01 December 2009
Uncertain times make for marked changes that catch observers by surprise. GM got into all sorts of bother and gave up the top spot in 2008 to Toyota so suddenly, it was an anticlimax. It was inconceivable that anyone would even get near to Toyota as world's largest vehicle producer for 2009. In fact VW had earmarked 2018 as the year it expected to be the largest vehicle maker. Well guess what? These uncertain times have thrown another curve ball. The VW Group has become the largest vehicle maker for 2009 for the first nine months.
VW scored strong sales in its two main markets - in China and Germany, while Toyota's two largest sales markets - USA and Japan - did poorly. This has led to VW manufacturing 4.4 million vehicles in nine months of 2009 compared to only 4 million by Toyota. Ford has done surprisingly well with 3.7 million vehicles made, ahead of GM's 3.6 million.
Toyota will view this as a temporary setback and should take back the top spot in 2010, but the battle is well and truly on.
The bottom line: You cannot write Toyota off, but VW has the momentum and the better brand balance.