Europe could become the world’s vehicle sales powerhouse as the EU expands and trade increases with Russia and North Africa, according to Mazda’s sales head for the region.
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Mazda Europe vice president Phil Waring said: “Ultimately the European market could stretch from Donegal in Ireland in the west to Vladivostok in the east, then from the Faroe Islands to North Africa. The sales potential is phenomenal.”
But he added that Europe is currently in a state of flux with the industry still awaiting legislation on CO2 emissions and a review of the changes to block exemption [EU rules allowing the auto industry to mandate the brands sold by retail outlets and to control servicing, parts supply and vehicle service data].
“We need clarity,” he said. “Both on emissions and block exemption where the conclusion is that not a lot has changed. Manufacturers still maintain control and there has been no significant increase in independents in the service and repair sector.”
While the EU has expanded, there are still many more eastern European countries wanting to join.
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By GlobalDataWaring noted: “While Russia is unlikely to join the EU it recognises it as its major trading partner and the frightening thing is the size of the country.
“While western European markets will remain fairly stable there are real opportunities in developing markets, not only Russia but in countries such as Poland, where we actually have no sales presence right now, Romania (where Mazda has an independent distributor) and the Balkan states.
“Ukraine is potentially the wealthiest country in Europe if and when it exploits its mineral and oil deposits. We have to build our presence in these markets and expand with their economic growth.”
Mazda wants to increase sales in Europe from 315,000 vehicles this year to 440,000 by 2010 although Waring said he did not envisage many more dealers “but we have to make sure they are in the right places and that they are getting the best possible return for their investment”.
A review of block exemption regulations, he believes, will lead to more multi-franchising in which case Mazda needed to become the manufacturer of choice.
He said: “That means treating dealers as real partners and not just paying lip service. The biggest problem for dealers everywhere is the investment demands made by manufacturers to meet standards and we have to manage that issue, listen to the retailers and act on their feedback.
“In terms of standards we have to make sure these are things the dealers want to do anyway.”
The big challenge over the next two to three years, he said, is generating profit for Mazda and its network. “Over the next 12 months we will be conducting a complete review of the European network to make sure we have the right number of dealers according to our volume and we must also make sure that we increase sales revenue per outlet.
“We must accept that more multi-franchising will happen and that means we will have retailers with competitors on their site. We have to make sure we do the simple things and see that Mazda showrooms stand out from the rest in terms of the colours we use and the ‘customer touch points’. Changes have to be cost effective but above all we have to have dedicated Mazda sales staff. That is most important within multi franchises. Mazda cars have to be sold by Mazda people.”
Chris Wright
