GM looks at hip-hop and bling for growth
General Motors sold more than 17,000 cars in the UAE last year through five of its brands – Chevrolet, GMC, Cadillac, Saab and Hummer – up from around 14,000 in 2006. It has now changed into a higher gear to drive its market share into double-digits. This is in stark contrast to its global performance where sales dropped seven per cent in December (according to a Bear Stearns analyst), and the company took a massive write-off of $37.4 billion (Dh137.3bn) in the third quarter.
“We have almost doubled the business in two years, but frankly, there is more room in the market for us,” said Terry Johnsson, President of General Motors – Middle East Operations. He told Emirates Business he anticipates more growth in the years to come, as GM’s market share in the UAE is “still shy of 10 per cent”.
To maintain and improve its position, Johnsson said GM has been encouraging dealers in the region to consolidate operations.
Yesterday, Chevrolet and GMC dealers in Dubai and Ras Al Khaimah, Al Yousef Motors and National Auto, joined forces to form Al Ghandi Motors. Unlike a number of its large competitors such as Ford and Toyota, GM doles out its dealership rights by brand, which can fragment the market and increase costs.
Johnsson explained the rationale for the Al Ghandi consolidation as a way to cope with expensive land costs in Dubai and the “increasingly expensive costs of talent and human resources”. The shopper and consumer also benefit from more choices and more convenience.
Johnsson said there are no other plans for consolidation, but “the same forces that have driven these two agents together are still going to be there”, hinting that this trend may continue.
In an era of a weak dollar, US-based GM has a relative advantage due to exchange rate regimes in the region when compared to its European and Japanese competitors. “The weak dollar definitely helps,” said Johnsson.
But GM is not relying on favourable exchange rates to fuel its growth in the dollar-pegged region.
The company has been actively courting the Arab youth through sponsoring football in Saudi Arabia and motor sports such as drag racing and drifting throughout the region. The next big trend that Johnsson predicted is in auto accessories and customisation – with Saudi Arabia being the key market in that respect.
“Consumers are looking to add performance and a lot of bling,” Johnsson said, using vernacular when referring to the array of wide rims and gold plating that adorn so many vehicles on the Gulf’s streets.
GM plans to continue to connect with consumers through music and sports.
Johnsson is hoping to work with West Coast Customs – the auto customisation shop that gained fame through MTV’s Pimp My Ride.
Over the past decade, many analysts have given much weight to hip-hop artists as the new arbiters of car tastes, and Johnsson said that this trend is “what will make the automobile landscape quite fresh and quite interesting”.
Saudi Arabia, GM’s largest market, did not perform as well as the rest of the region. Johnsson attributed this to a decrease in large government tenders.
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