Dubai: Volkswagen Middle East is on its way to revamping its presence in the region and entering a whole new ball game on competition.
Stefan Mecha, regional manager director, spoke to Gulf News about the new five-year plan that is underway to treble the company's annual sales. "Our basics are good. Now it's time to grow," he said.
While the manufacturer normally plays the volumes game in other markets, its brand placement has been closer to the premier market here. However, it plans to change that and aim to be the number one European manufacturer in this region.
In a segment that represents 45 per cent of the volumes in the market, its "new sedan strategy" will take shape over the next few years. This includes a new Polo sedan releasing early next year, a replacement for the Jetta and a new mid-sized sedan yet to be revealed will hit the showroom early 2012.
Mecha said the new model would be bigger than the Passat and more adequate in price, while being oriented towards this region and especially its Asian competitors.
"We will expand our products for a full range that we normally cover, but haven't here ... Fleet is becoming increasingly important," Mecha said.
Aside from the new sedans, the maker will be launching a model below that of the Polo to cater to the small car market and entering for the first time, the pick-up segment with its Amrok, the one-tonne pick-up.
The maker will not be positioning its prices as the cheapest in order to compete with the Asian makers, nor as the priciest or premium market, despite having a model that fits every segment.
"We're not focused on one- too much money or two; too little money. We're more about the passion for the brand," Mecha said.
Showroom
Supporting its growth strategy, VW is working with dealers to invest in the market. New showrooms will be a part of the strategy. Expansion plans are already in the pipeline.
"There is a clear plan with partners, [to grow] simultaneously with the new cars. This is what you will see in the in the next few years. Volkswagen will become more tangible for the customers," he said. Three years from now, Mecha said the VW plan is to become the number one European brand in Middle East.
The German brand recently signed dealership agreements in Iraq and will be ramping up business as of September, in Kurdistan and later in Baghdad. "Now is the time to invest in Iraq," he said, following the lead of other auto manufacturers that have already set up bases in the country that is considered by many to be a massive and relatively untapped growth market, as it recovers from warfare and rebuild on oil revenues.
Visibility
To increase visibility in the local market, VW will be looking at various untouched opportunities in niche markets such as the rent-a-car and public transport market.
Additionally, building brand loyalty that passes on for generations has been the auto manufacturer's global strategy, but which never caught on in the Arab region. Getting closer to the younger population and be the first car that any person drives, with its identity based on a car that one looks for if considering safety, while being within the budget will be the strategy going forward to gain ground on market share.
"We have to get into people's minds with brand awareness. The best ambassadors of the cars would be more cars on the roads so the brand can get closer to its customers and more tangible," he said.
The carmaker sells 10,000 cars a year in the region, maintaining a market share of 1.5 per cent.
Globally, the brand holds 11 per cent of the market share, while boasting up to 30 per cent in its well-established markets.
"We have to acknowledge that the Asian manufacturers have a great heritage here. But five per cent of market share is very do-able," he said.
Often a deterrent to purchase options, after-sales service is another area that is being enhanced to trump the competition.
VW has opted to provide free service after every 15,000 kilometres, as opposed to the usual 5,000 Km, saving on additional cost, while projecting confidence in the product's endurance. It will also offer a three-year warranty on cars, more than it does in home market of Europe.
