At MTI, Egypt’s leading luxury car vendor, business has never been about volume. Because of low-overhead and hefty price tags, the company has only had to nail down a handful of sales annually to let the business boom.
The operation has always been dynamic, and that’s why nobody at the company headquarters in Heliopolis seems worried about the worst global recession in recent history.
The theory around the office is that the recession hasn’t hit Egypt as badly as it hit more developed countries around the world. Instead, they say, Egypt suffers mostly from a psychological recession.
And Marketing and Showroom Manager Mostafa Salah has been charged with slaying the psychological white whale.
“Maybe the thing has a very psychological effect in Egypt. It might not have had a direct hit from the global recession, but you are afraid it will come so you’re just pending all the buying decisions at that time, Salah said.
MTI boasts Land Rover, Jaguar, Ferrari, Bentley and Maserati as its top selling cars. And the mental recession has caused sales of these brands to slow.
The economic slowdown couldn’t have come at a worse time for the auto industry. Manufacturers release their new models in the last quarter of a calendar year, and the cyclical auto industry depends on the last four months of the year to boost sales numbers.
“Actually, the recession started at the last quarter of 2008, Salah said. “We started to feel that something wrong was coming our way. Actually the last two months was difficult for most of the automotive industry, especially the luxury car segment.
Salah believes that any early recovery may be stymied by the onset of summer, which is traditionally the slowest season for car sales. Any real bounce-back, therefore, will likely wait until the early fall.
“I think we’re still in the decline stage, Salah said.
MTI’s biggest seller is the Land Rover. Salah and his team managed to sell 150 of them in 2008. But Land Rover hasn’t traditionally been MTI’s flagship product. Recent trends and fashions, Salah said, have driven luxury car clients towards SUVs. After only selling 40 Land Rovers in 2006, the team more than doubled that figure to 90 in 2007.
Its Land Rover showroom is out near the airport.
MTI’s second biggest product is Jaguar, which it sells 80 to 100 of in a year. Bentleys and Ferarris average about 10 a year, while they sell about eight Maseratis annually.
One of Salah’s biggest efforts as head of marketing has been to build awareness about the company’s Bentley, Ferarri and Maserati division.
“We didn’t have our main focus on these brands, he said. “People don’t know we have those three brands in Egypt.
Salah explained how he used to run into these types of cars around Cairo and hear from the owners that they had imported the cars from the Gulf. He interpreted this as an opportunity to extend the company’s reach.
For a boutique company, one of the great challenges has been targeting the marketing campaign directly at the highest income Egyptians. MTI can ill-afford to spend money on the vast majority of the Egyptian population for whom Jaguars will always be out of reach.
As a result, Salah has spent a considerable portion of his efforts cultivating a direct mail list that has allowed him to reach out directly to the “A-plus clientele, as he calls them.
Though MTI was founded in 1996, it has only recently begun aggressively sponsoring high-end events around Cairo for the sake of increased visibility. Golf tournaments, cocktail parties, and everything is fair game for the marketing team.
MTI has also made certain adjustments to keep sales numbers up over the course of the recession. For one, the team is bolstering its customer service record, now offering four years of free service on Jaguars. Though its customer service offerings depend on the make and model of the car, Salah said the company is trying to broaden and lengthen the scope of its services.
For the first time, too, MTI is bankrolling a financing plan on its own books. Though it had, in times past, hired firms to help underwrite finance plans, MTI launched a solo effort last month. The latest offering will allow Jaguar and Land Rover buyers to pay 50 percent of the cost of the car up front and pay off the rest over two years interest free.
“It helped a lot, actually, said Salah. “We closed like five or six deals in three weeks, which was a very good figure for us. I never anticipated that success. But actually that helped people and encouraged them to buy.
In an effort to streamline its myriad of offerings, the marketing division will now bundle finance and service packages, selling them to the client as one.
In perhaps the strongest sign that MTI is still feeling good about its standing on the uncertain economic landscape, Salah was eager to discuss the expansion plans and ideas the company is working on.
Late this year, the company will open a Bentley, Ferrari and Maserati showroom out near the airport. This will complement the company’s preexisting Jaguar and Land Rover dealerships. Salah said that even though this showroom was in the works before the onset of the recession, there was never serious discussion of shutting down the project once the economy went south.
Salah also said he hopes in the next few years to follow the population demographics – especially the high-income population – and open a showroom in New Cairo. MTI is also eyeing the Alexandria market.
And with customs duties on car imports expected to be phased out over the next 10 years, Salah is hoping MTI can start to reduce prices and grab a larger market share.