Interview with Jack Rodencal, Managing Director, Chrysler Group Middle East
The last of our current series of interviews with senior car guys about the state of the industry as we head into 2012
By Shahzad Sheikh
Q. Whilst initial expectations for 2011 were optimistic, it appears to have been a case of a stalled recovery with political unrest across the region, a natural disaster in Japan severely impacting the car industry, and fears of a double dip recession causing buyers to put off purchases. Now in the final quarter, do you find things are better, worse or about what you expected for the year?
There have been challenges of all kinds this year, but where Chrysler Group Middle East is concerned there are many success stories in terms of sales, tempered with frustration where we just can’t get enough vehicles to satisfy customer demand.
The successes are Jeep and Ram, which have shown exceptional growth over 2010.
Jeep sales have, to date, more than doubled. All of the Jeep range – Compass, Patriot, Cherokee, Grand Cherokee and Wrangler – have seen year on year sales growths, led by the award winning all-new Grand Cherokee with sales that are quadruple those of 2010 and the Wrangler, which has achieved 50% sales growth.
Ram sales are so far 150% up on 2010, and we’re expecting to close the year with double the sales that were achieved in 2010.
On the other side of things, the growth of Dodge sales is currently down by 10% year on year, as we’ve been severely constrained by the fact that we currently can’t get enough production to meet the exceptionally high customer demand for the all-new Charger, Durango and Challenger.
Similarly, Chrysler sales are currently down 50% year on year due to the late introduction of the all-new Chrysler 300, which is only just about to be fully launched in the region.
However, we’re confident that we will meet our sales targets for 2011, continuing the success that we worked hard to achieve in 2010.
Over and above the vehicle ranges, we’re continuing to focus on customer satisfaction as well – infrastructure-wise, we are consistently reviewing and enhancing our operation, sales and marketing strategy and have carried out a full re-evaluation of our dealer network, all of which are having a positive effect.
Q. What changes in strategy, if any, did you have to employ to cope with the changing situation and unsettling events of the 2011?
Clearly, the economic and political environment that has prevailed throughout 2011 has made things more difficult for everyone, but we have been extremely fortunate in that the renaissance of the Chrysler Group came about at the perfect time, including a business strategy that has seen the company transform itself over the last two years – a remarkable achievement by any standard.
Everyone in the extended Chrysler Group family, from employees to union partners to dealers and suppliers, has worked tirelessly to deliver on our promises and to win back public trust in the Company and our products. The new products have completely reinvigorated our brands and our showrooms across the Middle East and we remain focused on fulfilling the goals outlined in our global 2010-2014 business plan.
Q. In the retail environment in the UAE what have been the major developments this year, particularly in light of the new finance rules requirement buyers to have a minimum 20% deposit on new car financing?
New finance rules have served to underpin the far more considered approach that customers take to major purchases such as cars – aspects such as long-term cost of ownership, vehicle reliability, fuel efficiency, real value for money and overall quality are among the key criteria in the buying process.
Q. Has there been any apparent shift in the demands, needs and requirements of customers? Are they buying more used cars, are they chasing more incentives, are they negotiating more, are they playing hard to get?
I think all of the manufacturers will agree that there has been a shift in terms of customer demands and expectations – gone are the days when you could effectively buy market share through vehicle pricing. Today’s consumer is far more sophisticated and well-informed.
Vehicles have to blend style and performance with high levels of quality, functionality and advanced technological features into a package that offers clear value for money and manufacturers have to back this in the long-term through quality after-sales support. For example, we back our vehicles in the UAE with a 5 Year, 100,000 kilometre manufacturer warranty.
Q. Is new product still helping you to get customers into the showrooms?
All of our new models have been very positively received, creating demand that is far outstripping current supply levels. The momentum that we started with the all-new Jeep Grand Cherokee at the end of 2010 has been sustained by the Dodge Charger and Durango.
With the eagerly anticipated Jeep Grand Cherokee SRT8, Dodge Challenger SRT8 392 and Chrysler 300 also joining our product range in the coming weeks, we’re expecting our showrooms to keep very busy!
All of our new model introductions epitomise the company’s new design, quality and engineering ethos, the results of which are attracting more and more customers to our brands.
Q. Have you had to work harder at marketing your products and brand this year? What’s been the most effective way to deploy your advertising spend this year?
Competition is more severe than ever, and I think it’s fair to say that every automotive brand has had to work harder than ever over the last year.
The key to success is to give customers the vehicles that they want and need and then communicate with them in ways that effectively and impactfully reach them. That means looking beyond (but not ignoring) traditional media channels like press and TV to increase advertising effectiveness and ROI – digital media and social channels are rapidly becoming more important.
It’s also important to demonstrate your commitment to customers rather than just talk about it – the Middle East market is very important to Chrysler Group – like any other global automotive market it has its own unique characteristics, and the key to being successful here is to fully understand it by listening to customers and providing them with products that have the capability, styling and features that they want.
We find that our product line-up matches customer requirements very well – the Jeep range, Chrysler 300, Dodge Charger, Durango and Challenger are all well-established favourites in the Middle East and the latest model introductions have continued to build on the incredible success of the Jeep Grand Cherokee which was launched at the back end of 2010.
Such is our commitment in this area that we recently carried out a special thermal testing programme, the first of its kind in the region, which is a key addition to Chrysler Group’s intensive on-going programme to enhance and improve the quality and performance of its vehicles on a global level.
The prime objective is to not only consistently meet but exceed customer expectations, and that’s why a team of Chrysler Group specialist engineers and technicians from the US carried out extensive vehicle testing in the UAE, Oman, Kuwait and Saudi Arabia. This recognises that in the harsh environments of the Middle East, climactic conditions and vehicle usage differ greatly from any other market in the world.
The testing programme included peak time traffic driving, highway driving, long-term shopping mall idling and off-roading in mountain and sand environments. Key criteria such as AC performance, engine system cooling, material and paint durability, electronics, drivetrain and transmission were among the many key attributes evaluated.
While the testing was underway, a specifically designed, dedicated customer-focused programme, “The Voice Of The Customer”, was also staged to gather valuable feedback and enhancement suggestions directly from drivers of Chrysler, Jeep, Dodge and Ram vehicles.
Q. Looking ahead, what are your realistic expectations for 2012?
If we look first at the global picture, Chrysler Group’s return to profitability, the repayment of US and Canadian Government loans more than six years ahead of schedule, double-digit worldwide sales increases and a new product line-up that’s gaining real momentum in the marketplace gives us real confidence for 2012 and beyond.
Given adequate production to meet the ever growing demand for Chrysler, Jeep, Dodge and Ram vehicles, there is great potential to increase our market share which currently stands at just over 1%, and we have achievable plans in place for significant growth over the coming 5 years.
