INTERVIEW: Johannes Seibert, Managing Director of BMW Group Middle East, on the company’s regional strategy, the brand’s success and customer engagement
Published on 23 March 2016 by Shakhnoza Muradova
Anastasia Varnavskaya, Head of the Automotive Portfolio at Adam Smith Conferences: What global automotive trends affect BMW’s business in Middle East?
Johannes Seibert, Managing Director of BMW Group Middle East: In the Middle East region and beyond, we can see a major trend towards SAV and SUV vehicles. In 2015, for the first time, our X model range – from X1 to the X6 – accounted for more than 50% of our total sales in the region. That is first of all a good development, as we feel that our X Models are exactly meeting the requirements and desires of our customers. On the other hand, the demand was so strong that demand exceeded supply, especially for the X5, which is the most-sold BMW model in the region.
Another trend is that we are observing customers becoming more demanding and more discerning, especially in the premium and luxury market segment. Therefore we are continually developing and strengthening the retail level of our brands BMW and MINI. BMW Group has strong importers and retailers in the region, who are ambitious, customer-oriented and committed to invest.
Anastasia Varnavskaya: What are the most challenging and promising business areas in the region’s auto retail market at the moment?
Johannes Seibert: The development of the oil price naturally presents a challenge. However, in its 100 years of history, BMW Group has learned to cope with challenges and volatility. We have great belief in this region, as our importers do in our brands and the result is continued investment in facilities, people, training and technology.
To maintain our leading position, we put a strong focus on developing strategies that not only improve the overall customer journey, but that also take upcoming consumer trends into account. We have worked closely with our importers to implement our Future Retail Strategy across our sales channels, which has three core objectives – first, to increase the number of possible contact points with customers and prospects; second, to increase the services and benefits offered in our retail channels; and third, to enhance the retail experience at all touch points. By implementing this strategy we are not only evolving alongside the modern consumer, but are also creating a seamless and significantly enhanced journey for our customers.
Anastasia Varnavskaya: Has your strategy changed to reflect the current economic situation?
Johannes Seibert: Our strategy is long-term and stable. We are looking at sustainable, long-term success, which is reflected in our partnerships. We experience that in challenging times, customers look for strong brands and reliable business relations, which we and our importers can offer.
Anastasia Varnavskaya: What steps are you taking to strengthen the BMW regional dealer network?
Johannes Seibert: We are very much focused on the expansion and upgrading of our retail facilities throughout the region together with our importers in order to ensure that the retail network continues to meet the demand of our business expansion. Our partners have invested over USD 300 million in their facilities over the last five years, thus we are in a very strong position at our retail locations, and have several new projects ongoing.
For example, in Saudi Arabia, our importer, Mohamed Yousef Naghi Motors, recently opened two new facilities: a showroom and aftersales centre in Al Qassim to bolster services for customers in the Central Region. It features state-of-the-art sales and service facilities, Fast Lane Service, a dedicated workshop for the servicing of BMW vehicles and a new car delivery area. The other one is located in Riyadh on the King Abdul Azizi Road, large enough to accommodate 18 BMW and MINI models on display. This further compliments the four facilities already located in the Central region, including the recently expanded and refurbished flagship facility in Riyadh on Khorais Road. Both of these facilities are amid the implementation phase of the BMW Group’s ‘Future Retail’ strategy which is an important pillar of our enhanced customer orientation currently being rolled out across the region.
In Oman, our partner Al Jenaibi is preparing to build an additional dealership in the west of Muscat.
Anastasia Varnavskaya: What is the key to the brand’s success and longevity in the Middle East?
Johannes Seibert: There are various factors that contribute, but the main drivers in my view are our strong brands and innovative products. In addition, our importers across the region have taken customer satisfaction to new record levels by continuously investing in their facilities and in staff trainings, and by focusing on customers’ needs.
These factors were behind our 2015 success in which, for the first time ever, we exceeded the threshold of 30,000 BMW cars in one year – to be precise, we delivered 31,710 BMWs to our customers across 12 countries, resulting in an 11% growth over 2014, and 1,806 MINI vehicles across eight markets, a 12% sales increase compared to the previous year.
Anastasia Varnavskaya: How does what your clients want today differ to five years ago? Have you seen changes and if so in what way? How are you addressing this as a car manufacturer?
Johannes Seibert: Before I talked already about the trend towards X Models. This is a massive, ongoing trend. On the other hand, we see continually strong interest in the large luxury sedan. We launched the new model of our 7 Series flagship end of October, and since then more than 1,500 cars of the new model have already delivered to customers throughout the region.
Still a very young trend in the region is e-mobility and hybrid technology. We launched the BMW i8 plug-in hybrid sports car in June 2014, which demonstrates how outstanding performance and emotional excitement can be combined with very low fuel consumption and low emission. There are various plans and initiatives being implemented by local authorities across the markets to prepare for further growth of this technology. An example of this is the Dubai Water and Electricity Authority (DEWA), have debuted 16 of the UAE’s first electric charging stations last year and announced plans for 100 stations to open across the emirate. In Jordan, the Government has invested heavily in ensuring all the necessary conditions for electro mobility are in place. This includes a plan to build an extensive network of charging stations, many of which are already operational. Jordan is the first country in the region where the BMW i3 has already been launched.
Another trend that continues to grow is personalisation. Customers in the Middle East are brand-conscious and want to make a strong statement with their car that stands out from the crowd and as a result, our importers are receiving increasing interest in our BMW Individual and MINI Yours programmes. These enable the customer to individualise the car via exclusive materials, special exterior colors, and interior trim options.
Anastasia Varnavskaya: Can you say that a BMW customer’s experience is the company’s competitive advantage?
Johannes Seibert: Yes it is certainly one of our competitive advantages. Our importers and retailers play a decisive role in this respect.
In this context, I would like to come back to BMW Group’s ‘Future Retail’ Strategy, an important pillar of our enhanced customer orientation currently being rolled our across the region. As previously mentioned, Future Retail consists of various elements, including digital communication, creating visualisation and sales tools such as the Mobile Customiser, an iPad App enabling live car configuration and demonstration during consultations. It also redesigns the physical experience at the dealership with a new furniture concept, to create a modern, warm, open and friendly atmosphere. Future Retail also allows the way in which people interact with customers in the sale process to evolve by introducing new roles such as the BMW Product Genius, experts who will explain our automobiles and technologies, and help the customer to understand them in more detail. There are already 17 Product Geniuses across eight of our markets attending our customers. In addition, six outlets in five markets have the new showroom layout and furniture, with more to be planned for the near future.
Anastasia Varnavskaya: How do you drive engagement and emotional connection with your customers here?
Johannes Seibert: Customers are at the very heart of the BMW Group offering and as such, together with our dealers, we continuously look for ways in which to exceed their expectations – whether that’s by our products, technology or retail service.
As mentioned previously, we have developed the Future Retail Strategy, which has three core objectives – first, to increase the number of possible contact points with customers and prospects; second, to increase the services and benefits offered in our retail channels; and third, to enhance the retail experience at all touch points.
The customer’s journey, therefore, starts before the showroom – with our interactive communications portal at www.bmw-me.com. In 2014, we were the first automotive company to introduce BMW Mobi, a BMW website for mobile devices and desktops, to cater for the growing number of people using technology to access information. It is available in both English and Arabic and in just a couple of clicks one gets a 360-degree view of any BMW vehicle or even choose the colour and additional packages of the car. They can also access a preview of how the car would look via a visualizer function on BMW Mobi that enables them to change the cars’ body colour, rims and design packages. And we have some of the best fans any brand could hope for, and the most expressive on our social media platforms. We were the first automotive brand in the Middle East to reach 1 million fans and today we have 2.5+ million fans from around the Middle East who interact with us on our Facebook, Instagram and YouTube pages, giving us the unique insight into their tastes, and the opportunity to engage with them on a level that’s far more personal and tailored to their preferences. By responding and engaging to the members of our community, we get to create moments of serendipity that hopefully translate into a stronger bond between us and our fans.
Offering a seamless transition from the digital to the physical store, the customer journey continues on to the showroom itself, which has been refreshed as part of the Future Retail Strategy. The space is now much more inviting, with open floor plans and large screens whereby customers can visualise their future purchases with different colours and characteristics. Traditional desks have also been replaced with tables where people can sit next to one another in a much more collaborative manner.
Anastasia Varnavskaya: Which non-automotive retail brands inspire you?
Johannes Seibert: I admire brands with a strong premium positioning, with heritage and decades of successful track record, which never stop developing and innovating. Examples are Kempinski or Ritz Carlton in the hospitality business, Emirates Airlines, also Montblanc, Tod’s, Audemars Piguet.
Anastasia Varnavskaya: What projects are consuming your calendar right now?
Johannes Seibert: We are currently launching the all-new MINI Clubman across the region. The first model to embody MINI’s new, more grown-up visual identity, it is the most spacious MINI ever built. It is also the first MINI to enter the premium compact segment.
We’re also gearing up to launch the M2 Coupé and X4M, which both had their world debuts at the recent Detroit Motor Show.
And last but not least, there was a monumental milestone on Monday 7th March to celebrate the 100 year anniversary of BMW Group. There will be an official celebration in Munich, which will be attended by various different stakeholders including high-ranking public and political representatives, and streamed live to all company employees around the world in more than 140 countries, as well as several events across other markets. BMW Group has always looked to the future so we will not just review the last 100 years during our celebrations, but we will also look to the future. Our activities will therefore all focus on the future under the motto “BMW Group the Next 100 Years.”