In pursuit of perfection

Explaining the fine balance between social responsibility and premium performance, Guenther Seemann, managing director of BMW Middle East, takes Andrew Mernin for a spin through the rapidly changing world of the region’s booming automobile market

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By  Andrew Mernin Published  April 13, 2006

|~||~||~|Perched high in the blue expanse above Dubai is BMW’s Middle Eastern headquarters, a hive of activity complete with chrome and glass fittings as polished as the cars they produce. Ruling the roost in this office in the sky, is Guenther Seemann, the mild-mannered German charged with the task of upholding the company’s premium reputation in the region. “When I first came to Dubai 12 years ago, my office was in the World Trade Centre. It was the tallest and only building here,” he says, scouring the ever-changing skyline from his desk on the 18th floor of the Emirates Towers. “If you look outside you see different cars than in Europe. People in the Middle East want the best. It’s a premium region. The pyramid here is upside down. Our volume cars are the seven and five series and our lowest is the three series. In Europe it’s exactly the other way round. “Here, size matters – big engines, big horse power, full functions and the best leather”, he adds. And the figures certainly reflect this, with the five series representing 32% of sales in the Middle East, followed by the seven series, with 27%, and the three series with 17%. Last year the company reported record results in the Middle East with sales topping 13 753 units, an increase of 31% on 2004. The group sold 4733 in vehicles in the UAE, 2743 in Saudi Arabia and 1500 in Kuwait. Jordan was the company’s fastest growing area with a leap from 14 units in 2004 to 479 in 2005. Clasping his hands together with a furrowed brow, Seemann, the driving force behind this rapid growth in sales in the region, apologises for not wearing a tie. “Today is our ‘Mini’ day, so I don’t have to wear one,” he says with a wry smile. However, while the Mini is seen as the fun side of the company, its popularity in the Middle East is rising. Last year, despite the Middle eastern appetite for big engines, 600 Mini Coupes were sold in the region, as its sales increased by 9% on the previous year worldwide. Seemann says: “The Mini is a niche model for us. In Europe it’s a volume car but here it has been established as the small car premium brand. “Mini owners here have two or three other cars as well. The Mini is a fun car. It is not transportation that people buy to go from A to B, it is the second or third car in the family, and more and more students are buying it.” If Mini is the fun member of the BMW family, then Rolls-Royce is the regal grandfather. In 2005, the Middle East accounted for 15% of the 796 Rolls Royce Phantoms sold internationally as the super-luxury sedan firmly established itself in the region. Seemann attributes its popularity to an inherent cultural tie between the Middle East and the UK. “There is a very close link between the UK and the Middle East, a long, long tradition. People in the region know the Mini through ‘Mr Bean’ (a long-running British TV comedy in which the lead character drives a Mini) and Rolls Royce. The Rolls is one of the strongest brand names you can find. It is the most premium car that you can purchase in the world.” Although BMW now has a firm foothold in the GCC market, the company has had to alter its European marketing strategy to appeal to Middle Eastern car customers. “The biggest difference is customer care. We only have VIP customers here, so the customer care program is much more intensive. When you look at the show rooms, they are at ten times bigger than in Europe, they have TV, a gym or even a ‘Starbucks’.” “We do big launches, not in small show rooms, to show off our cars. It is a kind of a party, a huge event.” However, even as sales in the region go through the roof, Seemann has not lost sight of the social responsibility that huge companies like BMW possess. He has made it his personal crusade to convince the world that Hydrogen power is a viable option, providing a better performance than petrol without destroying the planet for future generations. “We first started looking into Hydrogen in the 1970s and are now ready to offer it to customers in two years time.” “People ask me why I am doing this as we are in an oil region, but oil is not a source that lasts forever. Hydrogen is just water and sun, so it is a lifetime source.” Hydrogen, made through the electrolysis of water, is a colourless, non-toxic, odourless gas that produces water when burned. Despite the obvious benefits, Seemann is fully aware of the reservations some people have about alternative fuel, but insists performance will not be compromised by applying eco-friendly methods. “Customers do not accept buying a car that can only drive 100 kmph for two hours. As our advertising slogan is ‘better driving’ or ‘the driving machine’, people expect a BMW to stay a BMW.” “You can only achieve this performance with Hydrogen power, in fact you can actually get more out of a Hydrogen engine than a petrol one.” And this is no false claim as, in 2004, BMW’s Hydrogen research car, the H2R, set nine records for a Hydrogen-driven vehicle, reaching a top speed of over 300 kmph. For such a senior member of the company that sold the world 1.32 million vehicles last year, Seemann is refreshingly honest when it comes to another major issue faced by the car industry in the region – congestion. Increasing car ownership in the Middle East, fueled by the economic boom, has led to a widespread epidemic of gridlock, particularly in areas like Dubai and Doha in Qatar. When asked about the duty of companies such as BMW to regulate the number of cars on the region’s roads, Seemann shuffles his feet uncomfortably but doesn’t avoid the issue. “The lifestyle of Dubai is excellent. But if you are stuck in traffic for one or two hours more compared to five years ago then it is not acceptable for people. “Ideally, a car company would be able to say, instead of 3000 cars, we will sell 1000, but the remaining 2000 cars would just be sold by somebody else.” It is in the company’s best interest to address the problem of congestion as Seemann explains that driving a BMW is not about going from A to B, but about the pleasure of driving and how to get from A to B. In search of a solution, he believes inspiration should be taken from Asia. “The best example we have is Singapore. In Singapore if you own a car you must have a parking space. “The government can also limit the purchase of vehicles. While there are no traffic jams, there are also enough parking spaces when you go into the city.” In Seemann’s adopted home of Dubai, the situation has worsened as the road network struggles to carry the volume of traffic, swelled by a continual influx of foreign workers. The number of cars registered in Dubai is in excess of 600 000 and in 2004 it was estimated that 350 000 cars travelled to Dubai from Sharjah and Abu Dhabi everyday. “Dubai is in desperate need of a premium mode of transportation – not a bus without air conditioning. You could take Dubai as a whole and build huge car parks to the north, south, east and west of the city with 10 000 or 15 000 spaces each. At each point there would be a train going into the city.” Although there are obviously issues on the region’s roads that need to be addressed, Seemann maintains that the Middle Eastern market is an integral part of BMW’s future growth. He says: “More and more people are coming to the region so a lot of investment is flocking here. The premium sector is growing even faster than the volume sector and we will continue growing at double digit pace.” But, in establishing a firm grip on the region’s car market, Seemann has steered the company past several obstacles. “The major challenge has been the fact that all Middle Eastern currencies are linked to the US dollar. Over the last three years, the dollar has declined and businesses and global currency have also declined,” he says. “The buying power became less and our products worth less. We shared the burden of this with our partners and customers.” As sales rocket and the road network across the Gulf grows at warp speed, the natural step of progression would seem for BMW to open a manufacturing plant in the Middle East. This, however is unlikely to happen in the near future. “At the moment we do not think of, or consider producing cars here because the volume is too small. “We work here with independent engineers who service and sell our cars to customers.” The company has announced that it will be opening the largest service centre in the Middle East in Jeddah, Saudi Arabia. Being constructed by Mohammed Yousuf Naghi Motors, the exclusive importer of BMW, Mini and Rolls Royce cars in Saudi Arabia, the US $10.7 million site will occupy 35 000 sq metres. It will also house a workshop, bodywork and paint shop and a warehouse. In Seemann’s 20 years at the company, which included a spell in Beijing from 1999 to 2000, where he set up the group’s China division, BMW has evolved from a traditional German business to an international, forward thinking institution. “About 15 years ago, our slogan was ‘made in Germany’, but we have deleted that because people need cars in all countries. In my office there are 16 different nationalities, so we can really say we are an international company. “Yes, the main office is in Germany, but we think internationally, and our cars are international. Over the last 20 years we have become an international company.” Seemann is a man who is proud of his workforce and believes it is them that have helped drive the company in the right direction. “BMW is one of the most desired companies to work for in the world. I think this shows that the people are happy but also challenged”, he says. In dispensing his thoughts on BMW, the regional car market and environmental dilemmas facing the industry, one thing that emanates from Seemann’s persona is an overwhelming commitment to deliver the very best service for his customers. As he says, “If you call yourself premium there is no compromise.” He is a man who will not compromise in his mission to meet the demands of the Middle Eastern market, in his battle to promote alternative fuel, or in his unflinching desire to maintain his company’s slogan of ‘sheer driving pleasure.’||**||

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