We have a vision for the Land Rover - Sheral Fernando

M F Jabir

Entrepreneur Sheral Fernando, speaking to Daily News Business, said the creation of SMI Automotive, a Joint venture with Sathosa Motors, where each party hold a 50 % stake would be an important milestone for the Land Rover business in Sri Lanka. A significant investment had been made by both parties to the project, he said.

Fernando said that at the end of the day, the customer would benefit by having an agent with a broader capital base and therefore they would have more strength to develop the brand faster. “For example, there is a two and a half acre land belonging to Sathosa Motors at Vauxhall Lane, which would be developed into a workshop which would benefit us. We would have more showrooms at Access Towers, which has been a proposed site. Likewise, through the synergy factors of Sathosa Motors, we acquired the strength which would benefit the brand. If you look at the brand name Land Rover, in 2004, nobody wanted this agency. The reputation of the Land Rover 10 years ago, was not what it is today. But we had a vision for Land Rover, where we could pitch it. We always thought of the Land Rover not just as a four wheel drive, but as a prestige car, a competitor to the Mercedes or the BMW and a form of a SUV is more versatile in Sri Lanka's context,”he said.

Fernando said that they had over a 10 year period to build the brand. To initiate this, two important factors have to be accomplished. One factor was to build a resale value. If there was no resale value and a person loses in resale, he would not repeat buying that brand again. And the second factor was to build resale ability that was to build a group of people who are willing to purchase the car.

Therefore, over a period of time, they have concentrated, spent money, trained staff to support the after sales service in the best possible way. Here again the joint venture would help having a workshop in the industrial area, which could be kept open for 24 hours. By such facilities, the brand could be taken from one level to another and the joint venture would come at a time where their financial strength and expertise would help take the brand to further levels.

“The Land Rover had always been a niche product, aimed at someone who really understands and appreciates vehicles,.Therefore, it is a very specialized brand. Hence, our whole concept of marketing would be eyeing those people who appreciate the product and sell the product to them. Luckily for us, in today's context of the market, our target is growing. It is growing not because of something we have done, but due to more people wanting to travel. More want to experience the outdoors. More people are turning environmental conscious and the need for adventure and exposure. All of these bring a requirement in their lives of having a good 4 wheeled drive vehicle. After the conclusion of the war and the development of roads, local tourism is at a point where it had never been before in the country. What we bring is a vehicle that could travel comfortably on any type of road, even on a paddy field. It gives you a sense of flexibility and a sense of versatility that none of our competitors could match. So we are introducing a unique proposition to the market at a time when the market really needs. Hence the timing is ripe.

When queried concerning the new workshop, Fernando said that they intend to open it by January 1, 2014, which would be on par with any international workshop in the world. “We would have computer links with the manufacturer and if we have any problem in our diagnostic, we could hand over the vehicle electronically, so that the manufacturer could explain as to what was wrong and if we did not have the parts, which could be ordered from the nearest dealer electronically,” he said.

When questioned as to the usage of the Land Rover by the Sri Lankan Armed Forces, he said the military forms the entire base of Land Rovers in Sri Lanka. The President's unit has over 50 and the Army over 500 and the Land Rover has been the most used vehicle by the Sri Lanka military. The Land Rover has been in use for over 22 years by the military for its competency. It shows, that the Land Rover has the strength and durability to perform. Not only the Sri Lankan military, the British military and many counties too use the Land Rover in their military operations, because it could be used in tough conditions.

Fernando broke the silence concerning the news about the new Range Rover that would hit the streets by end of March, saying it was an exciting vehicle. He said the new Range Rover was 400 kilos lighter than its predecessor and it would have a good demand. When inquired about the effect that the recent tax revisions had on the demand of Land Rovers, Fernando said it had less effects on this brand when compared to low end market vehicles as the client base was different. He said although there was an overall decline in the sale of vehicles, the country in general was doing well. The living standards of people throughout the country were much better. It was doing well in terms of work happenings and development activities around the country. If looked at sectorally, the local construction industry today was around Rs 100 billion.

The remittance of Sri Lankans over the world was doing well, the health and education sectors too were doing well. There were lots of sectors in the economy that were doing well and when looked at the demand of these sectors, they were not external but internal. He said a lot of people had money now to buy a nice vehicle and there was a large internal demand. He expressed optimism that the next two years in an economic sense would be very good.

When asked about the general trend in the industry, he said there were 1.5 million uses of trishaws, 500,000 uses of bikes and the total registration of cars were something in the region around 50,000. Even with the increase of duties, the demand for trishaws and bikes had not reduced very much so it is proof that there was growth in this market. The joint venture with Sathosa Motors was therefore to identify areas of growth and position themselves to take advantage of those areas. He further said the growth was mostly the bottom end which was a good thing. If the base market is strong and it was growing, that would cascade to the top. What is dangerous is if you have an inverse pyramid, it can fall anytime and is dangerous. But when your base is big and strong, on that you can grow the market,”he said.

In response to a question on new investments, Fernando said, “We are looking at new agencies and new areas of work. We are actively pursuing all opportunities of growth within the motor industry.

In conclusion, Fernando said, “At the end of the day, we are here and Access and Sathosa Motors wanted to invest in this company because of what the brand is today. And what the brand is today is the function of the people who bought into the brand and who have been loyal to the brand. We are very grateful to our customers and to their loyalty, because that is what has made Land Rover what it is today and upon this loyalty is that we will build the brand going into the future.”

Fernando said they had not ever lost a customer to a competitor. The Land Rover was part of a lifestyle and what they have done was showing people this lifestyle and when they buy into the life style, a car becomes a vital part of that. And once they buy into that lifestyle only a Land Rover would work for them..” So we have this loyal base of customers who have bought into this lifestyle which is really nice,” he added.