Earlier this year, Volkswagen Group announced a new national sales company, Elite Automotive Alliance, which would handle the Group's national distribution alongside their existing dealer, Samaco. Saudi Gazette was able to speak with Group's executive director for Saudi Arabia, Michael Mueller. Interview follows: Why a new distributor for Saudi Arabia? It's always a matter of competition. Wherever we are doing business all over the world, we are always looking for different dealers, so it always depends on performance, on the possibilities we see in a country. The biggest markets, the most important markets, are driven by the group as an importer, themselves. That's the idea. There are 26 national sales companies. One of them, or the youngest one now, is Saudi Arabia. So we decided to finally open here, with Porsche, so we have Elite Automotive Alliance as well as the existing dealer, Samaco. The additional distributor has seen new showrooms – what is the group's expansion plans for Saudi Arabia? The expansion plan is always based on research – we're a research driven company. We don't just blindly open facilities wholesale in Saudi Arabia. We are doing some research in which towns we want to expand and open up a showroom. At the moment we are located in Jeddah, Riyadh and Al-Khobar /Dammam. We have, for the three different brands, Samaco has three different facilities or showrooms, for the three different brands, in each of Jeddah, Riyadh and Al-Khobar/Dammam. EAA just opened now two show rooms here in Riyadh, one workshop facility and one showroom in Dammam. What targets has the Group set for this first year? It's the ramp up phase, but it depends on the network development. Of course we don't give ourselves too heavy targets. You can compare it worldwide: The Volkswagen Group always have a market share of 8 to 10 percent, and this is of course something we want to reach here. It's roughly our market share in the GCC at the moment, maybe not quite that high. The whole Middle East region has to develop more into that area. But in well-developed markets this is normally the share we want to end up with at the end of the day and what we would like to see here also. We are not that volume driven; we don't want to be number one in two years. This is not our focus. We want to do it differently and grow healthy, instead of quick. The XL-1 was at your opening in Riyadh – why feature a plug-in hybrid in a country like Saudi Arabia? For the opening for EAA the [XL-1] car was placed there as the first car that arrived here now in Saudi Arabia. It's quite a good signal of what the brand can do. It's not a volume driver at the moment, but who would have even expected it here in Saudi Arabia, where fuel is cheaper than water. Fuel consumption is a serious topic here in Saudi Arabia now, with the new regulations that have been launched, and the same with CO2. With the development that has been done and the engines, not only with the XL-1, I think for the future we have a big advantage. It's one of the future technologies and other brands within the group are following, even Porsche. Even they recognize that this technology is quite important, with the plug in Panamera and all the other models that are available. Even the sports car segment is looking in that direction. What's the allocation of XL-1s for the Saudi market? We didn't fix a certain number. If there is a market, then we open up the models for the market. How successful have the Porsche hybrid models been in Saudi Arabia? We've had individual orders, but the plug in technology has not been communicated properly in the whole Middle East region. This is something that needs more explanation. You have to explain to the customers the advantages. For example you are able to cool down your car using just the electric engine before you use [the car]. It's a great feature for the Saudi market. For the Porsche 918 Spyder, we sold 17 in Saudi Arabia. Do you have any support from the government for charging stations for plug-in hybrids? Not yet, but I think that comes with regulations. At the moment it's focused on fuel consumption and the CO2. Which will be the key models in Saudi Arabia for Volkswagen? I expect three main models – one is the Jetta, because it's entry level. It would be a perfect car for fleets and rental car companies. You get a lot of car for that size, with high quality. The second one I see is definitely the Passat, for retail and fleet business, but also a perfect car for families. And then there is the Touareg as the high-end SUV. Will the entire Volkswagen range be available? We're thinking about it. It's part of what we are evaluating at the moment. We'll think about what models fit to the Saudi Arabian market, and then after that decide whether or not to bring a model and what engines to bring. Like the beetle, I didn't expect there to be such a big hype around the beetle in Saudi Arabia. We're doing some studies about other models that aren't here yet. What about the diesel models? Not at the moment. The diesel fuel quality is not good enough for our diesel engines.
