Grupo Uribe: Focus On the Product, Not Sales Numbers

Q: What role does automotive play in Grupo Uribe’s operations?

A: We have been distributors for several large car brands, including Audi and SEAT. Our dealerships provide a range of benefits, one of them being Smartlease, which is a form of full-service leasing. For large clients, we take complete charge of their fleets. 

One of our goals is to support the client with choosing the right product by looking at their needs. We help them pick the right brands and estimate maintenance costs. This ensures that they can plan their budget in advance and provides them with certainty. It also allows us to work more effectively with OEMs, for example in the supply of spare parts. Our light-vehicle area is complemented by our heavy-vehicle division, where we represent the truck brand Hino. In total, our automotive operations represent 5 percent of Grupo Uribe’s operations. 

Q: What strategies are you implementing to cope with the latest market changes? 

A: We live in a very different political and socio-economic landscape than in 2017. Our goal is to grow our automotive operations through continuous improvements in our dealerships. People worry as they witness drops in car sales, coupled with heavy competition between car brands and between dealerships. There are markets where dealerships are 10 minutes away from each other and sell the same car brands. 

Our formula is to focus on strong service and providing advice to our clients; it is all about generating client loyalty. To do this we have to invest heavily in training our staff, which is expensive. Because of the ongoing hurdles, we have had to let people go at many of our dealerships. However, rotation has not been as bad as in other years, particularly 2017. Despite difficult times, we personally saw an extraordinary growth of 8 percent for SEAT last year. Overall, we had an increase in sales of 11 percent. Of course, this is in part related to the fact that we are still new in the market and consolidating our position. 

Q: What is your advice for struggling car dealerships?

A: With the increasing number of brands in the market, it has become harder for dealerships to stand out. Some are offering large discounts hoping to increase their sales volume. My advice to them is to not focus just on selling volume, but to focus on selling unique assets. Distributors need to have clarity on the advantages their vehicles have in terms of technology and safety and all other competitive aspects which make their brand different. This is how you convince a customer. Volume will come naturally but with healthier margins, clients will be convinced about why they trusted the brand. One way to improve this is through a strong digital outreach. 

The reality is that margins have dropped and sales and aftersales services have become more important as people turn to the used-car market and delay new car purchases.  

Q: Considering Grupo Uribe’s activities in LPG, are you considering offering this fuel for cars?

A: Yes, we have worked on this for the past two years and have invited several OEMs to consider it. Unfortunately, LPG use is still limited in Mexico. This makes it very hard for OEMS to see a return on their investment in this technology and the business models that go with it, considering as well product quality validation. The issue is not restricted to Mexico. Generally, there is limited infrastructure for LPG fueling, which would need significant investment, even though we are convinced it is worth it. This is an area where we would need the help of the government, car manufactures, and other LPG companies. For now, we are focusing on aftermarket LPG conversions. 

Q: Are you venturing into the electric car market anytime soon?

A: Electric cars are a fashionable topic. It is a reasonable alternative but far from ideal. In terms of the environment, there are issues with sourcing the lithium for batteries and the production process for these batteries still relies on conventional energies. Regarding the market, unfortunately there are no subsidies in Mexico. Furthermore, production volumes remain low. It is very expensive for OEMs to produce such a car if the product is not competitive. I see this as a long-term project. It could, however, have a significant impact on the services that dealerships provide. Aftersales services could be reduced to mere changes of tires or brakes. It is worth watching how the industry develops and to remain alert, while supporting our brands’ objectives. 
 

Grupo Uribe is active in the energy, financial services, LPG and real estate sectors. In the automotive sector, it provides sales, leasing, fleet management and aftersales services representing different car brands.