Karl Johan Sandasjo, General Manager at Gargash Motors, at their showroom in Dubai. The dealership believes there is a good chance that the commercial vehicles range would grow to 30 to 40 per cent of revenues. Image Credit: ZARINA FERNANDES/Gulf News

Dubai Gargash Enterprises, the Mercedes-Benz car dealership for Dubai and the northern emirates, wants to do more with the brand's commercial vehicles. To this end, it will have a dedicated division to handle this side of operations by mid-year.

While the commercial vehicle line-up has over the decades built up quite a track record in the local and GCC markets, a senior Gargash Enterprises official believes a lot more could be done by giving them more focus. The way to do so is to have a separate division handling sales and after-sales.

"We are making organisational changes to make things more efficient and one of this relates to the commercial vehicles division," said Karl Johan Sandasjo, who recently took over as general manager at the dealership. "There will not be separate showrooms, but what we will have are new workshops in Dubai and the northern emirates by 2014."

In the mid-term, the dealership believes there is a good chance that the commercial vehicles range would grow to between 30 to 40 per cent of revenues.

Significant lift

Commercial vehicle sales received a significant lift in 2011, with growth estimated to be in double-digit territory. Dealerships believe much of that momentum can easily spill into all of this year and even further.

It is not just commercial vehicles that are getting full attention at Gargash Enterprises. On the after-sales side, it has just extended the fixed menu pricing strategy beyond the three-year warranty on the Mercedes-Benz models.

The rationale is to try to retain those car owners who would otherwise consider going to third-party workshops once the warranty ends. Just as important, the dealership hopes that with the extension it would also get a chance to win back owners who currently use such workshops.

"We actually get a chance to talk to lapsed customers to try and bring them back," said Sandasjo. "Apart from the new pricing scheme, the 24-hour roadside assistance will be made available even to those vehicles older than three years."

Don't the revised pricing and the extension of the 24-hour services come at the expense of lower margins? "Happy customers translate into better revenues; they come hand in hand," said Sandasjo.

Solid start

The dealership had a solid start to the year with first quarter sales up 20 per cent and making a strong case for the tally for the full year to go past 4,600 units.

Last year, it sold just over 4,000 units, with the E-Class leading and the C-Class marginally behind.

"There's no question of having to play catch-up and last year brought sales back to near the pre-crisis levels," the general manager added.

"That makes for a very strong performance and so is maintaining a running rate of 20 per cent annualised if we take the first quarter. It will not be difficult to maintain this if the new cars that we are launching now become the expected successes."

A bestseller in its category, the updated version of the M-Class has just been launched. It will be followed by the GL and GLK.

Certainly, the dealership is playing to its strength on the passenger cars. Now, it is time to do the same for the commercial vehicles.

Mercedes-Benz: Small is still beautiful

Mercedes-Benz has not abandoned its small car strategy for the Gulf markets. While the B-Class has been phased out, next year will see the introduction of the much-anticipated new A-Class, which had an airing at the Geneva Motor Show.

"We have already been getting feedback from customers and we see it as offering a great opportunity to tap buyers who can't afford the C-class but still want to own the brand," said Wassim Derbi, marketing manager at Gargash Enterprises. (The pricing has not been announced.)

"Yes, we have tried with the smaller cars before — three years ago we introduced the B-class and the A-class way before that. It did not work that well not because of the pricing, but because demand was not there at the time for such products. The B-Class just wasn't for this market even though it sold well in Europe. It was then decided not to bring the B-class for this region." — M. N.