For many growing up in Essex, England during the 1960s, working for the Ford Motor Company was a rite of passage. Home to one of the country’s most famous car manufacturing facilities, Ford Dagenham, the sprawling plant employed over 40,000 workers at its peak and produced over 10 million cars and 37 million engines during its 82-year history. It was here that Stephen Odell started his career in the automotive industry as a graduate trainee.
The last two decades have seen Odell work for some of the world’s leading car manufacturers from Mazda in Japan to Jaguar in North America. But Essex has never been too far from his mind.
“I’m still a Spurs fan,” he grins.
And as he sits talking to Arabian Business on the Ford Middle East stand at the Dubai International Motor Show, surrounded by several shiny new vehicles Ford is showcasing in the region for the first time, it’s probably fair to say America’s second-largest automaker still remains a big part of his life.
Odell is in town to officially announce the launch of Ford’s new Middle East and Africa business unit. The new division, which he will oversee as president, will see Ford merge 47 countries across North Africa, Sub-Saharan Africa, South Africa and the Middle East into a single business unit from 1 January 2014.
The new unit will be managed in two sub-regions — South Africa and Sub-Saharan Africa and Africa and North Africa — with both reporting into a new Dubai headquarters.
“We have traditionally been represented in the Middle East and Africa… in a somewhat disparate fashion but this will allow us to unify the Middle East and Africa,” explains Odell.
“I realise that the Middle East is different to Africa but it enables us to bundle it together and see that as a business unit,” he adds. “The Middle East and Africa region comprises very diverse markets with different political, cultural and economic environments. Building a robust and profitable operation in this region requires a dedicated focus and clear understanding of how to support the unique conditions and customer needs in those markets.”
From a financial perspective, it will mean Ford reporting sales, share and financials in the region for the first time. “Previously, the Middle East was embedded in Euro Asia Pacific and the product that was sold in the Middle East would be principally sourced out of North America. Now we will report where sold opposed to where sourced so you’ll have financial and sales data,” explains Odell.
More crucially, the reshuffle means Ford will be able to better leverage the growth potential across the region. The firm, which has been operating in Middle East for more than six decades, expects sales for its Ford and Lincoln brands to increase 40 percent to around 5.5 million units by 2020.
“The Middle East and Africa are poised to become one of the next big automotive growth markets and we want to be there for these customers with great new cars and trucks,” says Odell.
“Each country is growing at different speeds across the territory,” he adds. “The Middle East is clearly a growing region. North Africa, as it comes through the environmental, cultural, political issues it’s going through now and it will, is always going to have a fairly strong footprint. But the piece in the middle, where there is a huge availability of raw materials, which is set to boost wealth and spread amongst the population — though not before 2020 — also provides great opportunity.”
After several difficult years in the wake of the economic crisis, the automotive industry is finally starting to show signs of a recovery. Competitors Chrysler and General Motors both reported strong profit growth for their US operations in October while Ford announced it would aim for global margins of as much as 9 percent by mid-decade, up from 6.2 percent during the first nine months of 2013. Across the pond in Europe things are also starting to look brighter with a 1.7 percent rise in third-quarter sales. The renewed confidence has seen the Detroit-based company’s stock rise around 30 percent this year.
The launch of the new regional business unit means the Middle East will play a more significant role in Ford’s growth looking ahead. “I would say that we see continued growth in the automotive industry as a whole,” says Odell.
“I see increasing growth in certain segments. The luxury car market is doing incredibly well throughout the Middle East right now so we see growth there. I also see some of the stable segments such as the medium car segment where we have just launched Fusion — which has had great success in the United States — and we are hoping for the same kind of success elsewhere,” he adds.
Many of the 5.5 million units Ford aims to sell in the Middle East will include the 17 new or refurbished Ford and Lincoln models it plans to launch in the next 24 months. The carmaker’s new Ford Fusion sedan and its EcoSport small SUV, both of which were on display at the motor show and have already achieved huge success in other markets, will make up a significant portion of those sales.
Over the last few years, the SUV and crossover vehicle market has boomed amid a rise in the number of motorists looking to limit their fuel consumption without reducing the size of vehicle too significantly. Car sales in the SUV segment are expected to reach 13 million — or 18 percent of the global vehicle market — by the end of 2013, up from 8 million the previous year, according to IHS Automotive.
Sales of the Fusion reached 21,740 units — up 71 percent — in the third quarter, providing stiff competition for Toyota’s Camry, which has consistently performed well in the mid-size car market. Meanwhile its EcoSport, launched in Europe and emerging markets, is also gaining traction, with plans to expand it to as many as 63 countries by 2017.
“Quite simply, it’s a growing market and we want to grow our business in a growing market,” says Jim Benintende, president of Ford Middle East and Africa. “Today we are launching 17 vehicles in 24 months — you cannot do that unless you leverage the Ford portfolio and that’s probably just the beginning of our ability to do that.
“I am not saying the recession is over but there are certain signs in Europe that [the economy is] stabilising. Dubai is in a very different place to where it was four or five years ago. The government has continued to invest, expats are returning, people are buying property and the Expo 2020 will be huge for the region,” he adds.
Unlike Europe, the Gulf has continued to maintain steady car sales over the last few years helped by a surge in oil prices and a boost in regional government’s welfare payments to preserve social peace following the Arab Spring. Ford Middle East reported a 20 percent rise in sales during the first three quarters of 2013 compared to the same period the previous year.
Odell says he expects that momentum to continue looking ahead. “In the GCC countries we are seeing strong growth for a number of reasons. The economy in the GCC has been very strong over the past five years, primarily because of the price of oil, which has been a big impetus for growth in the car market. This has been substantial in the GCC and we see that continuing.”
Odell’s new role might be a far cry from his trainee days in Essex but it’s probably fair to say you can’t take the man out of Essex entirely.For all the latest transport news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.
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