Crashing through the glass ceiling
Repositioning for tough times
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