How do you position the Daimler brands within the Nigerian market?
Actually we are responsible for the entire line of Daimler brands in the Nigerian market, and in particular the Mercedes-Benz brand, which has a long tradition of over 50 years in the market. Parallel to that, we also took over responsibility in Nigeria for Fiat Chrysler Automobiles, and you will find that brands like Chrysler, Jeep, and Dodge have a strong market in the country. The market is driven somewhat by the construction industry and the haulage business, because transportation is key in Nigeria. We have seven accredited dealers that report directly to us so that we capture and cover most of the regions in Nigeria for all of our brands. Of course the biggest relevance for now is Lagos, representing 60% turnover and sales. For now, the ratio of sales of passenger cars to commercial vehicles is about 55-45.
In the passenger cars business, Mercedes' global business in passenger cars is evolving. How has the onslaught of new products from Mercedes affected the way that you market Mercedes in Nigeria?
There's the constant innovation in terms of the E-Class and S-Class, and now newer products have come into the market. 4x4 technology has also played an important role; the GL class, now known as the GLS, the M-class, also now known as the GLE, and the G-class are our traditional players in the 4x4 segment. Here we have to adjust and adapt to the local needs, and those larger vehicles fit the bill. We also do equipment adaptation for this market; our products have been adapted and homologated to meet the demands of the African markets and, in particular, the Nigerian market. Beyond those premium offerings, there is the compact car segment, which is dominated by the A-class, B-class, the CLA, and the GLA, which is the smallest 4x4 vehicle we currently have in our portfolio. The acceptance is also quite good in Nigeria because the middle class is developing further. People have a choice regarding what to purchase, and they want to play in a field where a little premium is already something they can afford, and that's why we are very prepared also to meet this demand in Nigeria.
How have the newer, compact models performed in Nigeria?
It took a little bit of time to introduce new models, because it's a traditional limousine market. The S-class has a market share of 78%. In Nigeria, we are proud to always be the market leader in this segment. When we came up with the compact car models we also had to bear in mind that we have to be very competitive in this segment. We have improved and increased our after-sales activities. We have also worked to improve our presence on social media and to encourage people to interact with the brand, which has introduced us to a whole new generation. This is how we are structuring the passenger car business and we have the entire Mercedes-Benz portfolio currently available in Nigeria.
How have macroeconomic conditions in Nigeria affected your commercial vehicles business?
Until 2013 we had successful growth to report, especially in the heavy-duty commercial vehicle business. Now we have established a very strong position in Nigeria. Here we are talking about a construction sector, in particular, which relies heavily on excellent products with long durability, but also in terms of resale value after a period of five to eight years. After five to eight years, Mercedes-Benz trucks still have a resell value of about 60% of the price of a new one. This is actually a vital aspect that fleet operators and companies that are engaged in the haulage and construction business consider when buying commercial vehicles. In 2014, with the announcement of the new auto policy, the situation became more challenging, even for the construction and haulage companies. So, it was also a difficult year for commercial vehicles, and a lot of companies were affected. However, commercial vehicles are highly specialized, so there is a purpose behind it. Most construction firms see a positive outlook for 2016, and so do we.
How has the 70% tariff on new cars affected your business?
Obviously vehicles have become more expensive. However, we are working on the feasibility of establishing an assembly plant and are still undergoing studies and planning. The outcome of this will certainly be communicated to the public in due time.
What are your expectations for the year ahead?
This is the year of reconciliation due to the recent elections in Nigeria and the fact that a new government is still in its formative stages. We are therefore evaluating the challenges and taking steps to reorganize the business in Nigeria. In an organization like ours, we always have to be creative to develop other fields of business, such as the public transport sector, because this is where we are strongest. Last but not least, I believe that it will be clear which direction Nigeria is headed by 2016, and we will be prepared to be a significant part or continue to be a significant part of the automotive business in Nigeria. We have ambitious investment plans approved.