Crash­ing through the glass ceil­ing

Repo­si­tion­ing for tough times

Finweek English Edition - - Companies & Markets -

of MBSA should boost Mit­subishi. How­ever, as a brand in SA the Ja­panese man­u­fac­turer has had a “dif­fi­cult his­tory” in the words of Naidoo. For starters, dif­fer­ent man­u­fac­tur­ers brought dif­fer­ent mod­els into the coun­try. At one stage the Pa­jero was in the Ford sta­ble. MBSA and Mit­subishi’s strat­egy of con­sol­i­dat­ing the brand and build­ing a num­ber of stand­alone deal­er­ships (a process com­pleted last year) seems par­tic­u­larly pre­scient given cur­rent con­di­tions. None of the mar­que’s 47 deal­er­ships (most of which it shares with Mercedes-Benz deal­er­ships) have been forced to close and MBSA hasn’t laid off any staff.

“We had free­dom to re­align the brand and use new av­enues of reach­ing cus­tomers us­ing be­low the line mar­ket­ing and the In­ter­net. The fo­cus this year will be very much on cus­tomer loy­alty. We have cus­tomers who are on their sixth Pa­jero,” says Naidoo. Hav­ing a fresh line-up and not hav­ing to launch new mod­els into a de­pressed mar­ket should make Naidoo’s job some­what eas­ier.

A Pa­jero Sport SUV, based on the Tri­ton plat­form and first shown at the Jo­han­nes­burg In­ter­na­tional Mo­tor Show, could still be in­tro­duced in SA to com­pete against Toy­ota’s pop­u­lar For­tuner (it­self built on the Hilux plat­form). But no com­mit­ments have been made, the ex­change rate be­ing the ma­jor un­known fac­tor.

Un­like in the US, where “light truck” sales plum­meted, Naidoo doesn’t see the same hap­pen­ing in SA. “Here SUVs have al­ways been a life­style choice and more lim­ited to the up­per end of the mar­ket. South Africans will con­tinue to buy them. That said, there will be changes in the prod­uct mix at most man­u­fac­tur­ers.”

Naidoo is the first woman to head one of MBSA’s di­vi­sions and so be­comes the high­est pro­file fe­male in the SA in­dus­try. “I don’t think be­ing a woman has ei­ther ben­e­fited or hin­dered me in the in­dus­try. Apart from the per­sonal achieve­ment I’m happy to show other women that there’s no glass ceil­ing.” Grow­ing up in East Lon­don in the shadow of Mercedes-Benz’s plant, it seems Naidoo was al­ways des­tined to find her­self in the up­per ech­e­lons of the or­gan­i­sa­tion. She stud­ied for a BCom in strate­gic man­age­ment with a bur­sary from the com­pany and has only ever worked for MBSA.

ANY­ONE TAK­ING UP a po­si­tion at the head of a ve­hi­cle man­u­fac­turer in the cur­rent cli­mate must be strong willed and rel­ish a chal­lenge. Su­raiya Naidoo took up the reins as the new divi­sional man­ager of Mit­subishi Motors, part of Mercedes-Benz South Africa, on 1 Oc­to­ber last year. “Seven and a half years ago – when I was do­ing plan­ning for the whole MBSA prod­uct port­fo­lio – times were al­most as tough. The im­per­a­tive of that time is also what’s needed now: dis­ci­pline, cost-cut­ting and a real un­der­stand­ing of trad­ing con­di­tions,” says Naidoo.

Naidoo is sat­is­fied with the per­for­mance of Mit­subishi, given sales de­clines were in line with a mar­ket that fell more than 20% last year. “Given that our vol­ume seller – the Colt bakkie – was run out last year, the fact we could main­tain mar­ket share was pleas­ing. Sell­ing 8 900 units (down from 11 000 in 2007) in to­tal cer­tainly wasn’t what we planned. But I don’t think any­one in the in­dus­try ex­pected the sharp drop-off the SA in­dus­try ex­pe­ri­enced. Even more so among light com­mer­cial ve­hi­cles.”

LCVs, which ex­pe­ri­enced growth even as passenger sales tanked in 2007, also saw dou­ble digit de­clines in 2008.

The Colt’s re­place­ment – the Tri­ton – is pro­duced in SA and to ap­pre­ci­ate the im­por­tance of work­horses and dou­ble cabs in the lo­cal mar­ket, it’s worth not­ing the best sell­ing ve­hi­cle through­out all seg­ments last year was the Toy­ota Hilux, with al­most 30 000 buy­ers. The Tri­ton boasts 48% lo­cal con­tent and should help shield Mit­subishi from an­other ma­jor headache fac­ing SA ve­hi­cle com­pa­nies: the de­pre­ci­at­ing rand and con­se­quent price hikes. Fore­casts for ve­hi­cle price in­creases this year range from 8% to above 15%.

Naidoo ex­pects con­di­tions to be­come even tougher this year. “We’re looking at a de­cline of at least 10% and the first half will be tougher than 2008. While the con­sumer re­mains skit­tish we’re looking for in­fra­struc­ture spending to lift sales. The sec­ond half of 2008 should see a grad­ual and mod­est im­prove­ment. I’m more con­fi­dent about pre­dict­ing this year than last – 2008 caught ev­ery­body off guard.”

The old rule of thumb in the auto in­dus­try is that dur­ing tough times buy­ers re­turn to tried and trusted brands. That and the back­ing

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