Opting for the right means being left

Chinese carmakers need to take great care in marketing their vehicles abroad

If the motto of the real estate industry is "Location, location, location", one slogan for the auto industry might well be "Localization, localization, localization".

For just as selling a house next to a nuclear power plant can be difficult, automakers know that if you are in a country where people drive on the left, you are going to have problems selling cars with their steering wheels on the same side.

While that localization issue may seem obvious, such problems are not always clear cut, as evidenced by the decision of the Japanese carmaker Mitsubishi to call one of its cars Pajero, which in Spanish is a derogatory term referring to self-gratification.

For a Chinese car company selling its products in Africa, there are many issues to consider.

"In China, many people tend to buy cars that are black because they think it looks serious and respectable, but people here prefer cars with a variety of colors," says Sarfraz Premji, the general manager of CICA Motors Ltd in Kenya, a subsidiary of the multinational CFAO SA (the French East Africa Company).

CFAO had revenue of 3.59 billion euros ($4.69 billion) last year, 15 percent higher than the year before, and it employs more than 6,100 people and has 133 sales and service locations in 32 African countries and four French overseas territories.

The company has a long history with cars in Africa, having been a licensee for the Ford Motor Company from early last century, and CICA owns one of Africa's largest networks of auto sales and after-sales service outlets.

This multinational mix now includes China, and it is here that Premji, 43, who is the chief agent in Kenya for the Chinese Great Wall Motor Co Ltd, is having to draw on his expertise in localization.

"No matter what kind of cars you are selling, having a good audio is critical, too," says Premji, who was earlier responsible for CFAO's Mercedes-Benz sales in East Africa. "The locals just love playing music while they are driving."

Some African countries, especially in North Africa, can be exceptionally hot in summer, so cars that China exports to this part of the world obviously need customizing in that regard, he says.

Consequently, in relatively well-developed countries such as South Africa and Kenya, Great Wall has developed a new set of offerings for all high-end, mid-range and low-price market segments.

The most obvious of the adaptations has been shifting steering to the right for the two countries.

CICA imported and sold 240 of Great Wall's light trucks and sport utility vehicles last year, and the brand is one of the fastest growing in the company's sales.

The company also plans to represent and sell trucks made by Dongfeng Motor Group, another Chinese carmaker in Kenya, this year. It now employs 126 staff in the country.

"Although sales volumes cannot compare with China, people here have high expectations with auto products, and if you cannot provide the right cars, you will be out of the market very quickly," Premji says.

In positioning the Great Wall brand, CICA has focused on large farms, tea plantations, other agricultural businesses and the transport industry.

The Kenyan government has recently made changes to import regulations to try to reduce the country's dependence on second-hand car imports and get people to buy new cars, protecting the environment and reducing wear and tear on roads being among the main considerations.

The Bureau of Standards says only right-hand drive vehicles first registered no more than eight years previously can now be imported, and all face inspection before they are let in.

Sipping tea in his office in Nairobi, Premji says the registration period will be pared back to six years in 2015 and it is possible that imports will eventually be banned, presenting Chinese brands with a clear price advantage with an opportunity to swoop.

In Kenya, Great Wall's right-hand drive SUV costs $25,000 and its light truck $17,000, about 25 percent cheaper than the corresponding vehicles made by Toyota and another Japanese company, Nissan.

"However, Kenyan consumers place a high priority on brand name, which is the weakness for the majority of Chinese automakers," Premji says. "Limited by their influence and lack of advertising ability, Chinese brands still have a lot of room for improvement in terms of brand recognition."

That means that compared with major foreign automakers in Africa with years of sales experience, Chinese carmakers are seen as niche players mainly focusing on low-end car market, an image they are all keen to shed.

Premji says Chinese carmakers need to work more closely with reliable local partners and dealers, not doing everything themselves.

"As they are trying to gain an upper hand in the future war with foreign brands for having a larger share in Kenya's auto market, they should learn from Japanese brands."

zhongnan@chinadaily.com.cn

(China Daily 04/19/2013 page5)