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AMIC founder on the future of the auto industry - Daily News Egypt

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AMIC founder on the future of the auto industry

In September 1999, Tawfik Abou Shousha, then the general manager of Mustang, called in the top executives from Egypt’s auto manufacturers and distributors for a meeting. He asked them a simple question: What are your most recent sales figures? The figures they gave for their respective companies were quite different from the numbers made public …


In September 1999, Tawfik Abou Shousha, then the general manager of Mustang, called in the top executives from Egypt’s auto manufacturers and distributors for a meeting. He asked them a simple question: What are your most recent sales figures?

The figures they gave for their respective companies were quite different from the numbers made public by other sources, which went to prove his point: there was no reliable source of information on Egypt’s auto market.

“It would be a shame if we let these random statistics [be the indicators] of Egypt’s auto sector, he said, proposing a unified method and a body that would aggregate and distribute real sales figures.

This was the start of the Automotive Marketing Information Council (AMIC), the only non-governmental organization that provides statistics on Egypt’s automotive industry.

Shousha served as deputy chairman of AMIC – his brainchild – from 2002 to 2004 and was also the sales and marketing manager of General Motors Egypt at the time.

Now the managing director of Hyundai Saudi Arabia, which has the largest automotive market in Middle East, Shousha recently sat down with Daily News Egypt to discuss his outlook on both the local and global auto markets.

Work with what you have

Despite declining sales figures worldwide, Shousha was still optimistic, saying there’s no need to cut back on marketing efforts to stimulate sales.

“We have to be optimistic and think outside the box, he said.

Despite the crisis, Shousha said Hyundai Saudi Arabia saw sales grow 28 percent in 2008.

“The market’s growth in the last few years was stimulated by [a growth in] bank financing. But after the crisis, banks tightened credit lending, and that’s when Hyundai Saudi Arabia decided to launch in-house credit, he explained.

While many see this as a brave step, Shousha simply says you have to seize the “opportunities behind the crisis.you have to see the glass half full.

“While some companies are losing market share and profits, others are performing well, he said.

He sees two challenges to selling cars: attracting consumers then convincing them to buy.

He cited a study conducted by Hyundai in the US, which found that people’s fear of losing their job overrode their need to purchase a car. They came up with a strategy that addressed these concerns, giving consumers the option to bring back their Hyundai for a full refund within six months of purchase if they lose their job.

The strategic offer meant a 12 percent sales growth for Hyundai US while other manufacturers saw negative growth – Toyota sales fell 37 percent, Ford 36 percent and General Motors had to file Chapter 11.

Turns out only 0.5 percent of the cars sold were returned, proving that taking a little risk can be quite profitable even during a tumultuous financial crisis.

Moving ahead

Looking forward, Shousha sees a major change in the industry coinciding with the transformation underway in the global economy.

“After every big war, there is a shift in world superpowers, economic and political. After this global economic crisis, a big change will also take place. The traditional big brands like Ford, GM and Chrysler will no longer exist . [the question is] who is coming?

In the coming decades, Shousha foresees Asian auto makers taking over. Korean carmakers are very strong, as are the Indians he said, adding that TATA Motors will dominate the market. He placed China in third place; “everybody sees China as number one, but I see the curve declining.

Asked where he’d place Egypt on this map, Shousha said, “Egyptians, in this market need three things: planning, planning and planning.

AMIC was a small step in the process, he said, and there needs to be more initiative to take it a step further. “AMIC was an individual initiative from myself and I’m very proud of it; there needs to be another step, but who will take it? Officials? The private sector?

The 10-year-old council, he said, is yet to receive reliable information from Egypt’s traffic authorities.

Shousha recalled a study he presented to officials once comparing the Korean and Egyptian auto markets. In 1960, both countries were on the same track, producing 30,000 cars annually. By 1995, Egypt was producing 65,000 cars and Korea had increased production by several folds, and is now producing 3 million. “When I drew the two curves on a graph of cars production, Egypt’s curve was like a small snake and Korea’s more like a giant in comparison.

Despite a larger population and better resources including petroleum and access to trade routes through the Suez Canal, Korea is still way ahead, he said. But with more planning and some incentives, Egypt can try to catch up.

To read the other stories in our monthly special focus on Egypt s auto sector, click here:

http://thedailynewsegypt.com/admin/article.aspx?ArticleID=23948

http://thedailynewsegypt.com/admin/article.aspx?ArticleID=23944

http://thedailynewsegypt.com/admin/article.aspx?ArticleID=23945

http://thedailynewsegypt.com/admin/article.aspx?ArticleID=23947

Topics: FJP

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