Total dedication: Daimler's Roland Schneider
A year into the role as first president and CEO for Daimler Commercial Vehicles MENA, Roland Schneider discusses the aim of his new regional division and its business outlook
Stepping into the unknown is never an easy task, but Roland Schneider had less reason to be daunted than most as he was appointed to Daimler Commercial Vehicles (DCV) MENA in Dubai a year ago. Rich in experience, Schneider is a fitting Captain Kirk for the new enterprise.
Taking to the helm of the organisation which has effectively split the sales and service functions of the commercial vehicle business from the passenger car business, it is Schneider’s role to chart a new course for Daimler’s trucks, buses and vans in the region, and to boldly take the business where it has not been before.
Asked about the progress of his mission, Schneider states: “I think it is progressing well. We have a clear focus on commercial vehicles and on our four business units which we represent: Mercedes-Benz Trucks, Mercedes-Benz Vans, Fuso and Daimler Buses.”
A key part of the organisational split was to differentiate Daimler’s services according to the competing expectations of its consumer and commercial customers. Schneider notes: “These are different business units, different products, different segments, and we now have a dedicated team that is very close to our customers, and which is working very closely with our sales and aftersales partners in the markets.
“We have made a consistent, consequential organisational change which I feel is exactly the right way to do it. Now we have to serve our customers and our target group.”
As part of this shift, Fuso, previously a separate business entity, has also been brought under the wing of what is being referred to internationally as Daimler Trucks and Buses.
Schneider is positive about the addition to the portfolio, noting that Fuso, as a separate brand in a different segment, adds additional value to the organisation. He also highlights the bright future for the brand with the new generation of Fuso products now coming online and being brought to market.
He notes: “It is also a good business, and there are good opportunities for this brand in the 19 countries we look after at Daimler Commercial Vehicle MENA.”
Asked how the Fuso customers themselves are responding to the organisational shift, he adds: “They realise that with our support, with our organisation here, we will intensify and improve their business and approach to customers. The sales organisation is positive, because we are closer to them, and we can provide more support in terms of product, pricing, customer contact and aftersales.”
“This is a positive development for Mercedes-Benz and for the Mercedes-Benz brand for vans, trucks and buses, and also for Fuso as a brand. And this is what Daimler Trucks and Buses is for: it is a combination of these four business units covered in our organisation.”
In terms of physical infrastructure, less has changed. DCV MENA remains in the same building as Mercedes-Benz Cars Middle East, and continues to share the same Daimler parts distribution warehouse in Jebel Ali.
Asked about potential plans for a split of the logistics side of the business, Schneider notes: “That will not be done in the short-term, but with the exception of parts supply, the aftersales and the customer service approach is much more dedicated than it was before.” He affirms: “The approach for commercial vehicle customers is really totally different than it is for passenger car customers.”
Tackling new markets
Aside from the organisation shift, the formation of DCV MENA has increased the size of the region covered overseen by Dubai for the commercial vehicles side of the business. The territory has grown from the 11 countries covered by the group’s former entity in the UAE, Daimler Middle East and Levant, to 19 countries under the new organisation.
Schneider explains: “When the office was set up one year ago it was not just the separating of cars from commercial vehicles, it also involved a widening of the market portfolio.
“Before, it was mainly the Middle East — the GCC region — but when the commercial vehicles regional centre was set up, it was also set up for the North African markets. The MENA designation involved an extension to include Morocco, Algeria, Tunisia, Libya and Egypt. Iran was also added to the market territory.”
He continues: “MENA is a firm regional term: many international companies have MENA regions established, so this is nothing spectacular, but it is additional territory. We also see it as a positive because the North African markets are currently doing very well. They may be less affected by macro-economic effects in the Middle East — so overall it is good to have a bigger region established.”
For vehicle manufacturers, 2016 has not been the best of years, with the market suppressed in comparison to 2015. Daimler is not immune to these broader market trends.
Schneider explains: “The current situation is not easy, but we’re doing the best we can. We have difficult market conditions, but if I look at the organisation we have set up, I’m pretty satisfied. We have a focused team that is doing the right things and is close to the markets.
“In a difficult market situation, you have to be even closer to customers — so, together with our distributors, we have been trying to improve and intensify our customer relations. That pays off, and at Mercedes-Benz trucks our market share traditionally even goes up in difficult market situations, because people trust even more in Mercedes-Benz quality — but the situation is still not easy.”
Even as the oil price slumped, Daimler kept its business with its important fleet customers — a rare constant in the market — and during the last 12 months DCV MENA was also “luckily in a good position” to close a couple of major deals, according to Schneider.
He notes that there is good growth in Egypt, with many infrastructure projects ongoing. He contrasts this with Saudi Arabia, which has been hit hard, but adds: “On the other hand, for everyone who knows the Middle East a little bit, volatility means volatility down, but also volatility up again — so I think that the region will recover, and in the mid-term, present a lot of growth opportunities.”
Within the MENA region, a big question hanging over the industry is when the market will pick up in Iran, following the lifting of sanctions. Daimler has been upfront about its desire to re-enter the Iranian market, but at the same time is proceeding cautiously.
Schneider comments: “We have various activities going on with our distribution partners in Iran, but I think there is a general understanding, not just with us, but among other companies like us, that the market will take some time — just as the political and economic development will take time.
“I firmly believe in the mid-term future and the opportunities in the Iran market. Daimler is well set up for business. We have traditionally had very good relations with our Iranian distribution partners, and we have a very good reputation with our products in Iran – but it could take a little bit longer than some people might have expected. So it will be a good development, but it will take time.”
Product by Product
A milestone for Daimler this year is the 20th birthday of the Actros, which also just passed its 100,000th sale in the MENA region as part of a 200-unit order by Al Khaldi Transport.
Since 1997, every 10th Actros ever sold has been delivered in the MENA region, and 44,000 of those were ordered in Saudi Arabia.
The 4x2 tractor-head Actros 2041S truck, equipped with an Mercedes PowerShift automated transmission, was assembled at the National Automobile Industry Company in Jeddah — a joint venture success between Daimler and the Saudi conglomerate E.A. Juffali & Brothers.
Schneider comments: “I do not think I would be exaggerating if I said that the Actros is an icon and a landmark in the heavy-duty truck segment — and 20 years makes us proud to be able to celebrate that with this product. But it is the pride of the customers in the product that best shows the long-lasting success of the Actros in the MENA region.”
The Actros star shines so brightly in the region that it can eclipse the Mercedes-Benz heavy trucks, including the Zetros, which Schneider claims “has opportunities in specific segments”, as well as the Unimog — a product that is less truck and more tool, and which has been deployed in the region across a range of highly specific applications, including as a snow plough in Jordan.
Daimler is also present in light-duty trucks with the Fuso, and with the introduction of three models of Mercedes-Benz Accelo and Atego in March this year has clearly indicated its intention to strengthen its presence in the light- to medium-duty segment in the GCC.
Schneider explains: “I think we are traditionally very strong in heavy-duty, construction and long haulage — that’s the traditional strength of our product on the Mercedes side. Of course we are also extremely strong in light-duty trucks with Fuso. The Fuso Canter is also a landmark in our region, and with the Accelo and with an Atego we are also intensifying our efforts in the light- and medium-duty segment, where we believe that as Mercedes we also have potential.”
Asked about the scope for these premium products in their respective segments, Schneider comments: “I think the potential is growing. That might take some time. The Middle East is not a region where these changes happen overnight, but the concept of total cost of ownership is becoming more and more of a reality in the MENA region.”
He adds that the residual value of Daimler commercial vehicles is also an important consideration for its customers in the region. This can only be earned by investing in quality, customer value and parts supply — and even then only “after many many years”, he says.
Looking to the next 12 months, Schneider states: “We believe that the commercial vehicle business, across all business units, will be slightly better in 2017 compared to 2016. We do not expect huge changes or huge increases, but in 2018 we definitely expect an improvement.
“Next year we will introduce Fuso medium-duty and heavy-duty trucks, and we just introduced V-Class vans. So that’s a bunch of new products addressing attractive segments, — which also makes us quite optimistic.”