Playing it right: Ford assigns high priority to Middle East market
Changes are on at Ford Motor Co.’s regional operations. A new structure has been created, to be effective from January 1, by which sales, market share and financial reporting will be consolidated in the 47 markets forming its Middle East and Africa territory. In turn, there will be two sub-regions — South Africa and Sub-Saharan Africa, and the Middle East and North Africa.
Stephen Odell, executive vice-president and FMC’s president of Europe, Middle East and Africa, offers an insight into how the changes will all come together for the greater cause — that of expanding the brand’s footprint and volumes from this territory.
Q: If you look at this region, were there any missing pieces in the FMC strategy?
Stephen Odell: While each region is unique, we are all working towards the same objective... to grow our business profitably for all stakeholders. This is why we’re strengthening further our position through the creation of the Ford Middle East and Africa business unit, our fifth global business unit. We have a lot of pieces to put in place to grow in the region — you will see that happen quickly.
The Middle East and Africa is poised to become one of the next big automotive growth markets, and we want to be there for these customers. Our new structure will help us consolidate our business in this very diverse region and accelerate our growth. This is important because we expect total industry sales in the combined Middle East and Africa region to increase nearly 40 per cent to around 5.5 million units by 2020, and we want to be a major player in that growth.
Q: Ford has for some time pursued a multi-sourcing arrangement, i.e. models brought to this region need not necessarily be made in the US or Europe. Do you believe such an approach is paying off for FMC in the Middle East?
Stephen Odell: One of the primary benefits of the One Ford plan is that it gives access to a global portfolio of vehicles. This is why we are able today to launch vehicles such as the EcoSport - which once were regional-based products — in markets as varied as Asia, South America, Europe, Russia, and now the Middle East. We have a significant amount of new product introductions planned in the next 24 months.
Q: If one looks at the Ford line-up in these markets, it does look as if all possible categories have been covered. At the same time, there are models which may not have much traction in terms of current and even future demand (say, the Flex in the GCC, for instance). Wouldn’t it be better if FMC chose a âcars-for-courses’ strategy?
Stephen Odell: In this region, Ford offers a full family of vehicles from the One Ford global line-up, with a compelling offering in almost every segment, from sub-compact to full-size pickups, and more. It’s always the case that some nameplates are more popular than others, but having a diverse offering allows us to reach more customers in the market.
Having said that, Flex sales have been strong in Saudi Arabia, where demand for full-size utilities is growing. This year alone, we expect Flex sales to double in Saudi Arabia as families see its benefits.
Q: Going forward, do you see the Ford and Lincoln brands going their separate ways in how they seek growth?
Stephen Odell: Lincoln is important to Ford’s success. We are absolutely committed to reinventing Lincoln as a world-class luxury brand, with a client ownership experience to match. We are reinvigorating the brand here in the Middle East with the debut of the all-new MKZ and the MKC Concept. We’re focused on building both the Ford and Lincoln brands by offering the strong products that customers want.
Q: It was a surprise that Ford came out with the Vignale. Is this strictly going to be a one-off?
Stephen Odell: We see Vignale as an important step in the journey of building the Ford brand in Europe. Trends in European society and our own customers show us that there is a strong demand for high specification vehicles and individual purchase and ownership experience. Vignale is Ford’s answer to these shifts in customer expectations in Europe.
The first Vignale product will be the Mondeo Vignale in 2015. It is not planned to launch Vignale outside of Europe.
Q: What are the updates of the One-Ford strategy?
Stephen Odell: The plan has really not changed. The outstanding quarterly results we recently announced with a record third quarter 2013 pre-tax profit of $2.6 billion (Dh9.5 billion) shows the strength of our strategy. We are also seeing a lot of progress on our transformation plan in Europe and remain on track to return to profitability by mid-decade.
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