Mercedes-Benz In Cambodia: Q&A With James Zemke

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James Zemke, the general director of Star Auto (Cambodia), says their new Mercedes-Benz showroom out on Hun Sen Boulevard is well located, spacious, LEED certified as a green building, and has a fully-equipped workshop.

Star Auto (Cambodia) is the authorised general distributor of Daimler AG for Mercedes-Benz passenger cars and commercial vehicles in the Kingdom. The company’s general director James Zemke boasts 25 years’ experience in the automotive industry, having worked in the Middle East and Taiwan in market management roles for the Chrysler, Dodge and Jeep brands. He has also helped build an automotive leasing company in China, and managed Mercedes-Benz dealerships in Taiwan, China, and now Cambodia. 

Zemke was born in the US, earned an undergraduate degree from Wayne State University in Detroit, Michigan, and a Master’s degree from the American Graduate School of International Management in Glendale, Arizona.

B2B caught up with Zemke at Star Auto’s gleaming new Mercedes-Benz showroom out on Hun Sen Boulevard to find out more about the facility, the models, and the advantages of buying a vehicle from their official dealership: 

What new things have been happening at the Star Auto showroom?

Since holding our grand opening at the end of February we have received a LEED certificate granted by the US Green Building Council for green buildings. To my knowledge, we’re the second highest certificate in the country, and the first green-certified auto dealership, so we’re quite proud of that.

We knew when we selected this land that it received lots of sun and that electricity is expensive, so the building was designed to conserve energy. Features include louvres which block 8% of the sun hitting the showroom, double-paned energy efficient glass on the showroom, 100kw of solar panels on the roof, LED lights throughout the building, low-flow sinks and toilets, and rainwater recycling for gardening use. It is important that our customers are comfortable and the solar power gives us the luxury of not worrying too much about electricity.

What models do you have in stock? 

Mercedes produces over 40 different models of cars. Our new showroom normally holds 14-15 cars, though we’ve squeezed in 18 at times. We have the full range of Mercedes small cars – the CLA and GLA small cars – all the way up to the Maybach [stretched limousine]. The prices run from roughly $90,000 up to $300,000. It is possible to buy a lower-priced Mercedes, but we generally bring in fully loaded cars as its what most customers here want.

We can also supply more expensive cars including bulletproof cars and Pullman sedans (which are the real stretched luxury sedans) however we do those on special order.

At this point in time, the customers buying Mercedes tend to be wealthier, so our best-selling models are the seven-seater V-Class vans, S-Class, and then the large SUV, the GLS, also sell very well, so it’s still very much a large car market.

What are the most popular colours and features on cars that you sell here?

Although Mercedes-Benz has some stunning colours, 90-95% of what we sell is black or white.

Generally our customers want to buy a fully loaded car. Even, on some occasions, requesting features that aren’t so useful in this market. My favourite feature is ventilated seats, which have a built in fan that within a minute cools off the seatback.

Have you found sales have increased with the new facility? 

Both showroom and workshop traffic are up and sales are improving. Not only do we have more people coming in, but they are staying longer and interacting with the sales people more. The large showroom and customer lounge help.

Many people thought I was crazy for picking this location, but if you look at driving time from here to the city it’s very convenient.

Another reason we picked this location is because of Hun Sen Boulevard, which everyone calls “Sixty Metre Road”and is absolutely perfect for test drives. To book a drive, customers can come to the showroom, which is open seven days a week, or call us on 023 231 488.

I do think that as Cambodia continues to develop, Phnom Penh will have more than just one dealership. A city of two million in my home, the US, for example will have a minimum of two or maybe three dealerships.

Currently, the business is concentrated in Phnom Penh, but if I look at the economic activity in Sihanoukville, Siem Reap, Battambang, there’s definitely going to be a need for branches outside of this city, if not for sales then definitely for service.

How does the Cambodian market differ from other markets around the world? 

The biggest difference is that it is completely unregulated. Most countries have implemented safety and emission standards and regulations that dictate what can be imported and sold. In Cambodia, at this point in time, pretty much anything goes. The quality of the fuel here is not great but most cars coming were designed for European or North American markets, which have much cleaner fuel. As a result these cars experience a lot of mechanical and electrical problems.

Many roadside workshops try to solve the problem by bypassing sensors or removing components – but none of these solve the root cause of the problem, which is that its low quality fuel and these cars shouldn’t be here.

We import cars that have been modified by Mercedes Benz for Cambodia and because they’re designed to run on lower quality fuel experience fewer problems. It’s unfortunate that some customers just resell a car when it has a problem and the next buyer gets burned. There’s a lot of this kind of thing happening.

This market is 90 percent used cars and parallel imports, so with no restrictions on what can come in we’ve seen accident cars, flood damaged cars, and stolen cars. Unfortunately, some consumers are being cheated.

What are the advantages of buying a Mercedes Benz vehicle from Star Auto, as opposed to other unauthorised dealerships in Cambodia?

In additional to the fact that we’re nice guys… First of all, if a customer buys from us, they are getting a car that was designed for this market and was designed to run on the fuel that’s available in Cambodia and in this climate. The car comes with a two-year warranty. So if it breaks Star Auto is here to back it up and warranty work is done free of charge to the customer.

One other issue we see with the prevalence of used cars is that the manufacturer doesn’t know they’re here. When a safety measure is issued and work needs to be performed on the car, then the manufacturer can’t find it. If you buy from Star Auto, the customer can rest assured that even after the warranty period, if there are any safety issues on the car, we will stand by our product and get it fixed.

You can see from this building that we intend to stay in Cambodia for a long time. In addition to having a wide selection of cars in this place we’re also stocking a wide selection of spare parts. We have a fully equipped workshop built to Mercedes Benz standards and we do all manners of repairs: engine repairs as well as accident repairs, tyre service, brake service, everything.

Can owners of Mercedes cars not purchased through your dealership come to get their cars serviced here? 

We will fix anything. Unfortunately, from time to time we see a car that has been mucked up so much outside that it is very costly to get it back to factory standard condition. We don’t refuse anyone service, but we will tell the customer what they are looking at to get fixed. When the car comes in, we will do an inspection free of charge and advise the customer what needs to be done now and what can wait. Most important for us is to fix the safety related items – you don’t want a car going out with bad brakes, non-functioning airbags, things like that.

We have a frame alignment system with a laser measuring system. If a car has been in an accident, often times the frame has been bent or crunched. We can stretch the car, latitudinally and longitudinally, back to its original shape the same as when it left the factory. On the painting side, we have world-class painting systems. We have a spray booth to bake the paint so it lasts longer ad We are one of the first companies using water-based paints in our operation in Cambodia. It’s better for the environment and just as durable as the old-fashioned paint.

This interview has been edited for clarity.