With some Gulf markets showing an upturn, the Middle East operations
of DaimlerChrysler are expected to record a turnover of over $1
billion this year.
Vehicle sales are forecast to hit 25,000 units, with Mercedes-Benz
passenger cars contributing 12,500, Chrysler pulling its weight with
8,500 and commercial vehicles making up the rest, said Per Rasmussen,
vice-president and director for Mercedes Benz passenger cars. Last
year these markets, excluding Egypt, contributed 21,000.
General Sheikh Mohammed bin Rashid Al Maktoum, Crown Prince of Dubai
and UAE Defense Minister, yesterday opened DaimlerChrysler's new
Dh66-million, 26,600-square-metre Middle East headquarters and
logistics centre in the Jebel Ali Free Zone.
The new facility will consolidate all shipments of spare parts to
regional markets. At full capacity it can handle 70,000 parts. The
warehouse and distribution will be handled by Caterpillar Logistics
Service - the first of only four DaimlerChrysler regional projects to
be operated by an external service provider.
However, vehicle shipment will continue to be done through existing
arrangements with the distributors and will not be consolidated
through the free zone facility. "We have very good arrangements
with the distributors for vehicle imports from the U.S. and Europe. It
would not have made good business sense to change that equation,"
said David Glorius, vice-president and Middle East director for the
Chrysler/Dodge/Jeep range at DaimlerChrysler.
"We estimate cost savings of between 20 and 25 per cent with this
facility. The integration of our operations here have not meant job
losses - in fact Chrysler had a 10 per cent increase in staff, and
Daimler will do so by the half year."
But Egypt will continue to be managed through a separate entity,
Glorius added. The company has assembly line operations there for the
C-Class and the Cherokee. As for launching a similar initiative in
Jordan, "We are looking at opportunities there and have had talks
with King Abdulla about possible expansion of DaimlerChrysler's
Just recently Chrysler made an entry into Syria, tying up with the
existing Mercedes-Benz distributor. On the regional markets, Rasmussen
said, "While it's not great yet and nowhere near the 1995-1996
levels, there are improvements in some markets. The luxury segment,
however, continues to do extremely well.
"We expect to take a decision on the Smart car franchises after
June when we hold our first meetings on the issue. Our preference is
to award the rights to the existing Mercedes-Benz distributors.
"We are aware of the presence of stolen Mercedes-Benz cars being
brought in from Europe. This is a serious issue and we are in talks
with the distributors," added Rasmussen.
Source: Gulf News©