Clive Hammond, CEO, Automotive, Zawawi Trading Company shares his thoughts on the company’s performance, business restructuring and changing perception of Mercedes in the market in an interview with Mayank Singh.
How was Zawawi Trading Company’s performance in 2014, in terms of growth and initiatives?
Mercedes-Benz of Oman was very successful in 2014. We had a year-on-year growth of 35 per cent in sales in our car business and another 15 per cent growth in our commercial vehicles business. The key to the growth in the sales was the strong product offerings made by Mercedes-Benz. For example, we launched the new C-Class in June 2014. We repositioned some of our brands to bring them in line with the requirements of our customers in Oman and also conducted a price realignment. Zawawi Trading Company (ZTC) restructured its business making it completely customer-centric in terms of process and procedures. We have a very customer centric philosophy as we believe that it’s all about getting the customer mindset right to ensure that we deliver the best service experience. All these initiatives, paid off well, not just with initial purchase but we’re also starting to get repeat purchases and referrals through friends and family.
In an industry where an 8-10 per cent growth is respectable, how did you achieve a 35 per cent growth?
We put in processes that gave our customers better service. We communicated these and offered better product offerings. The overall sales process from creating the knowledge and desire for the brand, contacting the customer, selling products and following up, all of these became more robust than what we normally do.
You mentioned about restructuring the business. What were the changes that were bought about as a part of the reorganisation?
We appointed a head of sales who reports directly to the general manager. There is a retail sales manager and a showroom manager under the general manager. The sales and showroom managers in turn have specialised retail teams both for new and used cars. The management structure was revised, putting in clear levels of authority and a clear structure for the sales people to know as to whom to report and what to ask for. We were also aggressive about speaking with the finance houses to make sure we got the right rates for our customers.
Have you done the restructuring internally or was an external consultant involved?
We have done the restructuring ourselves. We can’t take all the credit, as Daimler gave us a template to work on but not a plan. From a qualitative point of view, it’s not using the product for growth, it’s using the product to support the customer. This brings us back to putting the customer at the heart of everything through product innovation, customer service, finance options, communication. That way we have a different approach since our service philosophy works with the customer in mind and not the product.
What explains the double digit plus growth in commercial vehicle sales? Was this the result of enhanced spending on infrastructure?
The entire growth of Oman’s GDP is driven by infrastructure. Therefore, it was a great opportunity for us to target this specific segment; when you build roads and trains, you have to have trucks to take material around, so through new product offerings from Daimler, we’ve prepared ourselves to provide for retail and fleets; again identifying two very clear channels and within them we then broke them down into oil and gas, water tankers, field tankers, construction industry etc. We’ve followed a targeted approach making sure that we’re offering the right products to the right people. Overall, we just got smarter on how we went to market.
Do you think that this percentage of growth is sustainable in future?
Growth is sustainable but not necessarily at these levels. I think through new product offerings, continuing with our strategy, introduction of a new sales teams, talking to more customers, taking more inquiries, we will continue to grow. We expect to grow by 15 per cent in 2015.
What are the product offerings that customers can look forward to in 2015?
There will be six new product offerings in the passenger car segment in 2015. These launches will touch sectors where we are not currently present in and that will attract new customers. We expect growth through the acquisition of new customers, increased loyalty and repeat business.
Zawawi Trading Co has set a 2020 Vision for itself. What are the goals that you are looking at as a part of it?
It is a vision which has both qualitative and quantitative measures. There is a volume aspiration from where we were in 2014. By 2020, we want a 50 per cent increase in the sale of new cars, 40 per cent increase in commercial vehicle sales, 30 per cent improvement in after-sales and labour hours and an eight per cent increase in customer loyalty. We’ve worked out a path to achieve these aspirations in the key areas of our business.
How do you segment your products? Who is the average driver for each of your segments and how do you position them?
Right now, I would say Omanis are 85 per cent of our demographic and 15 per cent are expatriates. We want to change that in terms of the ratio as we grow our segments. Historically, we have had strong government relations and sales in Oman. But now we see key growth coming from the retail sector, which is the sustainable part of our business. That’s been done through new models, good finance rates with some of our partners. Service improvements have also been a big part of it as we’ve had a significant growth in after-sales business and have seen loyalty and customer satisfaction increasing.
Is the E-Class your best seller in Oman?
In terms of retail, the E and S class vehicles are the volume drivers. But we saw the biggest change in the SUV range last year. In terms of the average driver, the younger ones are driving the A-Class, and the C-Class now. Middle management drives C-Class, while upper management is in the E-Class range. The S-Class is still the segment leader here and the Middle East per se is a huge market for the S-Class. The S-Class sells because of its refinement, quality, reputation and strong second hand value.
Oman is a young country with a younger audience below the age of 35. Many are of the opinion that BMW is sportier than Mercedes. Does this perception worry you?
No, it doesn’t. Historically we were perceived that way, but now the designs have changed significantly in the last two to three years. Mercedes-Benz offerings did not look as sporty and aggressive in the past, but that has certainly changed. Introducing new products like the A-Class and the CLA naturally brings in new customers. With new product design and affordable rates, we are able to target the young customer. A key part of our growth is selective positioning and marketing to reach our desired audience.
Has Omanisation been a major focus for the company?
Absolutely. We are 65 per cent Omanised, which is our quota for the industry. We have that across all our sites and through our recruitment we will continue to sustain that level. We’ve started to sponsors students in colleges so that in two-three years they will be in the market and will join us according to our 2020 growth strategy in terms of people. We started this in September 2014, and we’re sponsoring 38 students through the first batch. If required, we will sponsor more in 2015. According to our capacity planning, we’re good for now but this will help our future Omanisation levels.
Can you share some details about your professional background?
I started as an apprentice technician and covered many services, sales and operational roles whilst working for Jaguar Car UK. I entered the retail world as GM for Aston Martin and Jaguar franchises followed by Audi. First exposure to the Middle East was as GM marketing and communication for EK Kanoo in Bahrain. I became MD for Mercedes-Benz retail in the UK for four years before commencing current role as CEO, Automotive for ZTC in Oman.
