Relocating the Base of Operations to Dubai to Strengthen
and Solidify Service System in the Middle East
HAMER, a sales and service support center for distributors in the Middle East and Africa, was established in 1993 in Dubai, UAE.
In 1985, a free zone (special economic zone) was established in the area surrounding the port of Jebel Ali in Dubai, UAE. The Jebel Ali Free Zone (JAFZA*5) was the first special economic zone in the Middle East, and foreign companies were able to enjoy significant advantages such as preferential tax treatment and unrestricted hiring of foreign workers.
Honda activities in the Middle East, including service activities, had been based in Saudi Arabia, but in 1988, the Middle East Service Representative office was relocated to the UAE. In 1993, HAMER was established to provide sales and service support to distributors of automobiles, motorcycles, and power products in the Middle East and Africa. In 1989, the head office had already announced the guideline of “aiming for No. 1 customer satisfaction” in the Middle East, as well as sales of Civic and Accord, which are well-received in the region, in the various countries. With Dubai as its base, Honda was making a fresh start to establish its own service structure in the Middle East.
HAMER countries
7th Middle East and Africa Regional Technician Contest held at the HAMER Training Center
Honda Gulf FZE, importer and supplier of spare parts and accessories, began operations in 1995
Along with the establishment of HAMER in 1993, a training center was opened. In 1994, the first Honda Repair Technician Intensive Training Course (service technology training course) was held. Many mechanics in the Gulf region were foreign workers, and it had been difficult to educate them on service skills. The development and improvement of these skills was expected to be achieved through the continuous education and training of service technicians*6 working for distributors in the Middle East region, mainly in the six GCC*7 countries.
As early as the same year, Honda held the “First Middle Eastern Technician Contest.” Eight representatives who had won the competitions in their respective countries competed to demonstrate their daily skills. The contest has been held once a year since then, rotating among the host countries.
In 1995, Honda Gulf FZE*8 (HBD) began operations at JAFZA to import and supply spare parts and product accessories for automobiles, motorcycles, and power products to strengthen HAMER’s service system. The main goal was to shorten delivery times by centralizing inventory, even for parts that are replaced infrequently. This made it possible to respond to a larger number of customers more quickly and more extensively than ever before.
Both human resource development and the service system had made great strides.
- JAFZA: Jebel Ali Free Zone
- HAMER called its service associates and mechanics “technicians”
- GCC: Gulf Cooperation Council (Saudi Arabia, UAE, Bahrain, Oman, Qatar, and Kuwait)
- Honda Gulf FZE: Honda Gulf Free Zone Establishment was established in 1994, commencing operations in 1995 with the completion of its warehouse.
Implementing Training Programs Designed to Achieve
Autonomy of Service Operations in the Middle East
While some countries in the Middle East tend to impose strict regulations and restrictions, the UAE accepts foreign workers in a wide range of occupations, many serving as long-term employees. There are many foreign mechanics who have been working for more than a decade.
Against this backdrop, in the 2000s, HAMER shifted the role of its Japanese service associates from direct instruction of mechanics to training of instructors, aiming to make the service system more independent and raising the level of technology throughout the Middle East.
The Honda training program has an instructor certification system, starting with Authorized Instructors (A|) who can perform periodic inspections and maintenance, Senior Instructors (SI) who can perform general repairs, and Chief Instructors (Cl) who can perform more difficult repairs. SIs can train Als, and CIs can train AIs and SIs.
In this training program, by having instructors who are expected to be with the company for a long period of time train mechanics, an independent training system can be established by local staff. Furthermore, if this system can be expanded to distributors in other countries, a powerful service system can be realized in the entire Middle East.
In the mid-2000s, human resource development was standardized among distributors in each country, and the instructor certification system took root. In 2007, the “Middle East and Africa CS Meeting” was held, where HAMER, HBO, and distributors in each country worked together to improve customer satisfaction (CS).
In 2009, a UAE distributor was ranked No. 1 in customer satisfaction in both sales and service. In 2010, 2011, and 2012, Saudi Arabia was No.1. In 2015, the CSI (Customer Satisfaction Index) for the UAE, Saudi Arabia, Oman, Kuwait, and Bahrain were No.1*9, and in 2017, the transition to an independent service structure in the Middle East region was complete. This new independence made it possible to provide instruction from Japan via videoconferencing, and expatriates in charge of technical instruction for instructors and mechanics achieved their desired goal, and returned to Japan.
- According to Synovate (2009), TNS (2010-2011), and Kantar Japan (2012 and 2015)
Always Putting Customers First While Addressing Societal
and Market Changes
The global environment surrounding the automobile industry is changing dramatically, and the Middle East is no exception. The UAE is focusing on reducing greenhouse gas emissions and announced a policy in 2020 to increase the procurement rate of electric vehicles (hybrid-electric vehicles and EVs) by government agencies. In addition, Dubai is already installing EV charging stations in shopping centers and other locations. In Saudi Arabia, as a move to reduce CO2 emissions, the importation of EVs and EV charging stations for commercial purposes was permitted in 2020.
Looking at the market, as the population of the younger generation continues to grow and women are allowed to drive in Saudi Arabia, people’s interest in cars is expanding from middle-class sedans to small SUVs, hybrids, and a variety of other vehicles.
While these new possibilities opened up, the unexpected happened: Jun Habara, who was stationed as HAMER’s senior general manager from 2017 to 2022, faced an unprecedented crisis. At the time of his arrival, unit sales in the Middle East market were beginning to decline, and the challenge was how to secure revenue from after-sales services. This was compounded by the outbreak of COVID-19.
Habara said: “As a number of countries went into lockdown, customers were not coming, and sales of new vehicles were zero for several months. After-sales service revenue became more and more important. So, we decided to aim for a total cost coverage ratio of 100%, which means that profit from after-sales service alone is enough to make the business viable".
How much of the distributor’s total expenses could be covered by the gross profit of after-sales service was the question. If it exceeded 100%, the distributor would be able to survive on profit from after-sales service alone.
HAMER staff made a list of all customers who owned vehicles that were due for periodic inspections, called each one to set up an appointment, and called the distributor’s management to confirm the appointment even before the customer came in, to persuade them to thoroughly perform the inspection work. In addition, the company worked with HBD to launch a number of after-sales services that distributors could easily recommend to customers who came to their stores. Training was also provided to distributor staff to improve their negotiation skills. In addition, the company collected all data, such as the number of customers who called and made reservations, and the number of those who actually came to the store.
Habara said: “If we fail to achieve our goals, we examine the causes and incorporate countermeasures into the next week’s plan. We tried to do everything we could in after-sales service.”
As a result of these initiatives to overcome the crisis, HAMER’s local associates and its distributors are now more motivated and committed to after-sales service than they were before the COVID-19 pandemic.
It has been almost 50 years since Honda entered the Middle East region. Honda business in the region has expanded. Takayuki Yamashita, who was stationed in HAMER and became the general manager of Africa and Middle East Business of the Regional Operations (Europe, Africa and Middle East) after returning to Japan, has a vision for the future of the Middle East business:
Yamashita said: “Until now, we have worked hard to establish a service system, and despite the difficulties, I believe that there was a great deal of room for growth. From now on, however, the times will change rapidly. We have to be wiser in many ways and we have to be faster. What is needed to win through the fierce competition? It is the challenging spirit. This is the one thing that will always remain constant. I believe this is what makes Honda unique.”
HAMER is promoting various initiatives in the Middle East region in cooperation with Japan, keeping a close eye on market trends and changes in people’s needs, and in a three-way partnership with HBD (the parts division), and distributors. In the activities of sales and service support, HAMER will do its best to provide customers with safety and reliability through products useful for daily life. Its efforts in the Middle East region will continue into the future.
Service Staff Were Challenged by Harsh
Climate and Automobile Usage
Some Saudi Arabian drivers travel 1,000 km on the
highway at 160 km/h, even in the summer season
when daytime temperatures range from 45°C to 50°C
- In hot weather, the temperature above the dashboard exceeds 90°C (hot enough to boil eggs)
- Rubber components such as engine mounts break
- Sudden braking causes uneven rotor wear and juddering
- Sudden acceleration and deceleration causes malfunctions of the air conditioning unit
- Headlight covers turn white due to sandblasting
- High road surface temperatures cause tire surfaces to crack
