Cantering to the lead
Having a stable of differentiators is how companies cross the line first in the competitive Qatari automobile and truck market place
The harsh climate of the Middle East is not ideal for vehicles, whose engines are prone to overheating in the excessively high summer temperatures and vulnerable to clogged air filters in the change-of-season sandstorms.
But Mitsubishi has made Qatar its primary market, through a number of differentiators.
Hisham Farouk Al-Sahn, general sales manager Mitsubishi Qatar, part of the Nasser Bin Khaled group, claims that the company has cornered the lion’s share of the Qatari construction and trading market when it comes to light weight trucks: “Qatar is totally focused on construction, from roads and stadiums to rail and other civils, with the highest growth in the GCC when it comes to construction – and our vehicles are there,” he says. With World Cup 2022 coming down the line, he believes this momentum is sustainable.
While this is a comfortable space to be in as a supplier, Al-Sahn stresses that competition is rife and to survive in this tough market, a company has to have significant differentiators to set them apart.
With Qatar as its main market, it makes sense to be in the country and not to simply be part of a supply chain. Al-Sahn elaborates: “After-sales is one of the strongest differentiators we offer; our sales figures mean nothing without after-sales service, parts availability and access to ongoing customer care.” While he recognises that some Qatari companies purchase vehicles from the UAE, he asks: “Who is supporting them here in Qatar? There is no-one on the ground to help with breakdowns or spares.”
In accordance with the Ministerial Council of the GCC Standardisation Organisation (GSO) the trucks arrive from Japan complete with a GCC conformity certificate based on the relevant Gulf standards for new motor vehicles and tyres and are fitted with Euro 2 engines.
While this may appear low-tech, the higher specified engines don’t fare well in the extreme heat he explains and comments wryly “and they don’t require a technician with a computer to be called out if there is a breakdown”.
Mohmoud Al Churbaji, senior sales consultant says that the truck specifications vary from region to region and the Gulf requires specifically modified components: “The Gulf region requires efficient air conditioners, suspension systems and cooling systems – the latter because of the extreme temperatures here, sometimes reaching 53?C. The air conditioners have larger compressors and evaporators and a more powerful airflow.”
Any modifications such as installing a crane on the back of a truck or fitting a canopy are carried out by preferred body builders in Qatar.
According to Al Churbaji, the most popular Mitsubishi truck model in the Qatar market is the light-duty Fuso Canter truck. The entire range has found favour within trading, transport and general commercial and logistical arenas. “One of our major customers is Gulf Warehousing. They buy all their trucks from us,” he notes. “We own around 77% of the total market share of this truck segment,” he states matter-of-factly.
As Qatar is the FIFA World Cup 2022 venue, opportunities have presented themselves to the company which is expanding its facilities to cope with the demand as the construction projects roll out ahead of the huge event.
With two immense existing warehouses that can accommodate between 700 and 800 vehicles, Mitsubishi is ensuring that it is equipped to service its substantial market, with another warehouse in the pipeline, as Al-Sahn explains: “We are building a far bigger workshop and a 10,000m² warehouse to cope with the tremendous growth we are experiencing.”
Refat Shouqe, logistics manager at Ali Bin Ali Pepsi, a bottling company in Doha, is one of Mitsubishi’s clients. The company owns a substantial fleet of about 45 trucks – all Mitsubishi – to which new units are added each year. He is a committed brand supporter and says with enthusiasm: “We have already purchased nine new trucks this year. I have used this brand for the past seven years as it is reliable and economical. I get excellent after-care service from the team and I will continue to purchase my trucks from them in the future,” he vows. He claims that in all the years he has had the trucks, there has never been one major breakdown on any of his vehicles.
In Qatar rentals comprise about 25% of the truck market, with customers preferring to purchase outright. “The market rents small pick-ups, not the bigger vehicles,” Al Churbaji explains. However, Al-Sahn comments that one of the drawbacks to purchasing vehicles is finding financing and there is stiff competition among the dealerships to offer this facility. “There is an ongoing price war in Qatar, which is further exacerbated by the fact that there are only two financing companies in the country.”
Unlike many other countries where good financial standing determines whether or not a company gets financing for a fleet, in Qatar, many of the transactions are made in cash. However, according to Al Churbaji: “Most of the construction companies are loathe to use their cash flow for vehicles; they rather use it to pay their employees.
“The end-user differentiates between the dealers and the services they provide, one being in-house finance. By cutting out the bank, administrative fees are removed as well as interest on capital.”
The dealers therefore compete by offering ‘specials’ such as between 12 and 18 month’s interest free. There are also other ‘add-ons’ to entice the customer, from interest-free deals to free maintenance and/or service deals. This fuels the price war, but as a large group, Nasser Bin Khaled offers in-house financing, a significant differentiator in the market. “It’s a must have in Doha, to compete,” Al-Sahn says.
The company is fully equipped to take on the demand that they see coming down the line and with sufficient spares and parts on hand, as well as an efficient customer service team, its differentiators are making it a winner all round.