TBY talks to Yoahim Traenkle, General Director of Mercedes-Benz, on the strengths of the brand in Azerbaijan.
TBY What line of products is Mercedes-Benz focused on in Azerbaijan?
YOAHIM TRAENKLE We are very focused on passenger car sales. This is firstly because passenger cars are easier to sell. Secondly, when we started operating here a few years after independence, there was absolutely no commercial vehicle business. The commercial vehicle business only really took off in 2003 when the government started to allow construction works and building on a large scale. Since then the demand for construction vehicles such as dumpers, mixers, and so on has increased. These products are supplied from Turkey, which is also another channel for commercial vehicles. These channels are older and better established, making it difficult to get into the supply chain.
How has the services side of your operations developed?
Services are a true strength of Mercedes in Azerbaijan. Our workers are well trained and very experienced. A lot of them speak German, and this makes communication with our headquarters easy. Our staff are also regularly trained, both in Germany and around the world with our parent company Daimler. Our servicemen and mechanics are also sent for regular training to Moscow, Ukraine, or Kazakhstan, and also in country roughly six to seven times a year. The training courses we run here are taught by experts from Germany, as well as mechanical experts from Turkmenistan, Georgia, and Kazakhstan. These training courses help to back up the knowledge of our staff, as well as teach them new techniques and initiatives. One such initiative was the implementation of electronic diagnosis with a computer, the data of which are then sent over the internet to head office in Stuttgart, meaning no information is lost.
How strong is the competition in the luxury car market?
Several other luxury brands are represented in Azerbaijan. With respect to the competition, I’m mainly watching BMW’s operations. Bentley has also been represented for about two years, and that is a very high end and sophisticated brand. In addition, Porsche has become very popular over the last three to four years. It has a nice outlet in Baku and is performing very well. It is also possible to find exotic brands such as Maserati, but this brand is imported on an individual basis.
What is your outlook for the luxury car market in Azerbaijan over the medium term?
The sector will not see year-on-year growth forever, as there is somewhat of a limit to the number of products that we can sell. People who have Mercedes cars in their garages might consider another brand should they want another car, and that is also a factor limiting the sector. In 2007 we experienced our best year in terms of sales in Azerbaijan, selling 500 units. The crisis then affected business adversely. Business since then has begun to recover, and the general number of people who can afford cars is increasing. The increase in the number of cars seen on the streets of Azerbaijan over the last couple years is a result of crisis recovery, and we are optimistic about the future of Mercedes sales in the long term. Our goal is to achieve an average sales rate of 250 passenger cars and 100 commercial vehicles per year.
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