Rus News Journal

those brands which develop manufacture in Russia " Are popular;

the Co-owner of Petersburg holding RRT Oleg Barabanov how the Russian automobile market

By calculations of Minpromtorga changes, by 2020 in Russia on one thousand person will have 360 cars. To come nearer to such level, annually in the country should be on sale to 4 million cars, the largest shareholder of autoholding RRT Oleg Barabanov speaks. This reference point is base for investment programs of autodealers. RRT plans that by the end of 2012 in the autoholding property it will be already concentrated about 61 thousand in sq. m of real estate in the total cost 5,6 mlrd rbl. About what projects are realised now by the holding, what marks of cars are popular among their sellers, and also about, whether it was possible to dealers to earn on splash in sales of last year, Oleg Barabanov has told to the correspondent daily to Andrey Zhukov.

— In Petersburg already works more than one and a half hundreds motor shows. Meanwhile many dealers on - former declare intention to invest serious means in reconstruction and expansion. How much, in your opinion, the given investments are justified? Whether has reached the market of the dealer centres of saturation?

— the Answer to this question has been given still two years ago when Minpromtorg has prepared strategy of development of car industry in Russia, calculated till 2020. It provided two drivers of growth of sales: essential updating of a motor car park and increase in number of cars at one thousand person. At the moment of preparation of strategy middle age of the Russian motor car park made 12,5 years. Minpromtorg has considered that in 2020 of cars of such age remains no more than 20 %. In 2010 on the average in Russia on one thousand person was necessary 230 cars. On this indicator we were approximately on 50 - m a place in the world. Ministry plans supposed that in 2020 on one thousand person will already have 360 cars.

If to make a start from the reference points set by the government and to perform simple arithmetic operations it turns out that in 2020 in Russia should be on sale 4 million cars a year. It also is that indicator by which it is necessary to be guided, planning investments into development of the automobile market.

Further it is necessary to consider that besides building of the new centres it is necessary to reconstruct existing salons. It was possible if earlier to sell cars though in furniture store now we in general leave from concept a motor show and we speak about the dealer centres. The centre provides a full complex of services: the salon of the sales, HUNDRED, bank, insurance offices and etc.

the Answer to a question where and how many to build, gives geomarketing. Each manufacturer defines, what quantity of the dealer centres should be in this or that city. Conditionally speaking, on a city - millionnik should be two centres, on pjatimillionnik — ten. The same geomarketing defines borders of coverage of the dealer centre. Proceeding from city plans for development each manufacturer defines, where, in what area it is necessary to construct the dealer centre.

Thus, the general estimation of that, has reached the market of saturation or not, does not exist, in this respect each manufacturer has a opinion. For example, Land Rover considers that in their Petersburg it is not enough, Audi believes that till 2015 in a city two more centres should open. And here in Subaru think that is already enough the centres.

Nevertheless as today`s our indicators of number of motor vehicles per capita far not European car business building in a city will not stop in the near future.

— What volume of investments into business expansion plans RRT? In what regions the new salons, what area, what marks will open?

— This year for us the most difficult as we simultaneously complete seven dealer centres in different cities. We hand over three centres in Kazan (the area 9000 sq.), the centres in Voronezh and Yaroslavl (on 2200 sq.), in Vologda and Petersburg (on 2600 sq.). All of them for different motor-car manufacturers. The volume of investments into these projects will make nearby 1,2 mlrd rbl.

After end of these projects in the autoholding property will be concentrated about 61 thousand in sq. m of real estate of the dealer centres in cost 5,6 mlrd rbl.

the Next year for us there will be already quieter, we plan to complete in total four objects: two centres of Nissan in Pskov and Great Novgorod and two Subarus in Arkhangelsk and Murmansk. Next a feat We plan to make in 2014 — 2015 — for this time building of the big autovillage in Petersburg on crossing of the prospectus of Engels and a ring road is planned. At us in this place of the earth of 12 hectares on which there will be centres GM, Nissan, Honda, Man and etc. We assume that investments into this project will make 1,3 — 1,5 mlrd rbl. Now we while conduct designing, we spend coordination with distributors.

— On what sales volume you expect to leave after realisation of these plans?

— To us difficult precisely to foresee, as competitors will develop, but, I think that by 2018 we will be included into number of five - six largest autoholdings of Russia. If to speak about volumes in 2017 we believe that we can sell 60 — 70 thousand cars. Accordingly, the sales volume at group can reach 80 — 90 mlrd rbl. It three times more than now.

— last year and in the first half of the year of this year on the automobile market has poured out a pent-up demand generated after crisis 2008 — 2009. From - for it the sales volume of cars has seriously grown. And whether growth of sales was reflected in profitability of business?

— At the expense of a pent-up demand the Russian market has grown on 42 — 43 %, RRT thus thanks to opening of the new centres has grown on 96 %. Rates of increase could be more impressive, if not a tsunami in Japan and not the subsequent failure on the atomic power station Fukushima . This accident has affected all world car industry. The hi-tech manufactures delivering accessories for 80 % of cars of the whole world have suffered many. Restoration has occurred only by the end of the year. By this time for the Russian market the big lot of cars which for the sake of performance of plans of sales car factories have decided to realise till New Year`s holidays has come. As a result mad race of discounts and actions has begun. However the discount, as a rule, shares in a certain proportion between the dealer and the manufacturer. Proportions can be different — 50/ 50, 30/ 70 or, on the contrary, 70/ 30. Accordingly, in the end of the year at all dealers has fallen marzhinalnost by cars. As a result last year the income from sale of one car was reduced to 5 %.

for comparison: in 2004 profitableness at us was 12 — 15 %, on separate brands — 8 — 10 %. In 2008 on the average the figure on holding was already around 8 %.

However, a situation with profitability influence not only market mechanisms. Last year there were many tax changes in the country. The car business has lost possibility to work with ENVD because in any dealer enterprise works more than hundred persons. As consequence, the VAT, taxes from payment funds have grown. As a result, and this situation concerns not only us, and almost all dealers, the net profit after payment of all taxes makes from 1 — 2 %.

— That is on market growth it was not possible to earn?

— I so have not told. For last year we have generated good base of clients which will come now to us on service. However the share of incomes of it falls recently. If in 2009 it made where - that of 60 % on holding now when we began to sell more cars, about 25 % were reduced. But nevertheless at the further growth of sales on 10 — 12 % a year and increase of a share of incomes of service marzhinalnost will start to be restored on the sly and we can speak about net profit in 2 — 3 %. There will be it not earlier 2013 — 2014 and in the event that us again will not surprise with taxes.

— What plans at you on sales this and next year?

— Proceeding from sales volume forecasts across Russia in 2,85 — 2,9 million cars expects to realise holding in 2012 about 30 thousand cars. That is we expect to occupy a share in 1,1 % of the market that will allow to enter into ten the largest autoholdings of the country. As to 2013 I expect that sales across Russia will pass for 3 million cars. The holding including at the expense of input of the new centres and reconstruction of the operating can approach to figure 35 — 38 thousand cars.

— In connection with that change of structure of holding, whether reduction of number of the companies there are no at you plans to leave on IPO and to involve external financing for the development?

— In IPO a car business the next three years I do not trust. While the Russian companies do not pass neither on business scale, nor on transparency level.

— In what party the conditions which are put forward by motor-car manufacturers to dealers now change?

— Since 2004 when the dealer centres have in large quantities started to open, requirements of manufacturers have become tougher. The reason here that together with autoconcerns big banks come to Russia. It RCI - bank, Nissan bank, Volkswagen - the bank working with the group with the same name, BMW - bank and etc. Foreign banks, entering the Russian market, understand that at those volumes of cars which are sold by local dealers, it is not enough internal financing. For example, we should keep constantly in stock not less than 1,5 - monthly sales volume. If now the holding sells on 3 mlrd rbl. a month, 1,5 monthly turns — it is 4,5 mlrd rbl. Thus, at us on the average in a month in a turn should be 4,5 mlrd rbl. there is a question Further, and can give out banks to the client such money. Far few. For this reason to Russia there are large credit organisations which, on idea, should replace with the means money of small Russian banks. But that the western banks have started to finance dealers, the last should correspond to their standards. Us gradually bring under these standards though while, of course, very few people here corresponds to them.

— Why?

— I Will explain on our example. In 2009 RRT represented group of 110 companies. How to consolidate the reporting of such number of the organisations? How it to understand to the foreign creditor? Understanding that the similar structure of business is opaque to our partners, we are engaged the third year in reorganisation. Now instead of 110 companies eight. In the third quarter 2011 we could hand over the first incorporated balance here these eight companies.

— What it for the companies?

— Each of the companies is the dealer of certain mark. It RRT - Severo - the West — the dealer of Subaru, RRT - Ozerki — Nissan, RRT - Vyborg — Hyundai, RRT — Honda, RRT - the Car — Skoda, RRT - Motors — GM. A separate direction — RRT - Traks the company which is engaged in autotransportations. Besides, in separate structure the company " is allocated; the Autoterminal . She is engaged in wholesale of spare parts and preselling preparation of cars of Subaru. Accordingly, the regional centres are branches of these companies. A turn of each of the companies — approximately 5 — 10 mlrd rbl.

— the Structure of shareholders at all these companies is identical?

— Over them there is a management company which belongs to three shareholders — to Ekaterina Suhachevoj (9 %), Andrey Ivoylov (7 %) and me (84 %).

— What marks are now popular in dealers and who are not present?

— In leaders, as always, Toyota and Nissan, among dealers always goes struggle for them as it is the large system companies. Type popularity the Korean brands led by Hyundai. It is interesting Mercedes, work with this brand provides good marzhinalnost. However to co-operate with it it is possible only in big cities. The same history and from Land Rover — except Petersburg and Moscow it is more uninteresting to anybody.

Before crisis Volkswagen, but now a situation was not so popular changes. The company creates manufacture in Kaluga, it means that she counts on serious development in Russia. Therefore many want to become dealers of Volkswagen, Audi and Skoda.

Generalizing, I would notice that those brands which develop internal manufacture in Russia are popular.

— RRT recently has refused from dilerstva Ford in a number of regions. Why it has occurred?

— the Situation with ours dilerstvom Ford looked as follows. We have bought a building in which Ford salon in Vologda settled down from the going bankrupt company. After that the manufacturer has suggested us to open there the franchise, and we have agreed. Also in the answer we have suggested Ford to open the centres in Kazan and Petersburg. In Kazan they to us have co-ordinated, and in Petersburg – no. But as strategy RRT assumes cooperation only with those brands which centres are at us in Petersburg (it conveniently from the point of view of management, technology working off and so forth) That, having worked from Ford in Vologda one year and having pursued the scheme on sale in 900 cars, we with this manufacturer have refused joint activity.

— One of last calls for corporate business — formation of public initiative groups which by means of the Internet, social networks and etc. make new demands to the counterparts. These phenomena are observed among minority shareholders of the different companies who press on mazhoritariev, the same is and in the consumer market. In the automobile market such phenomena too meet? Whether it is necessary to react to them?

— We have already got used to actions of various groups. In 2008, for example, we were attacked actively by militian structures. They considered that proceeding from our sales volumes we should be engaged in cashing in. But we have once passed the check, the second — it was possible to prove nothing. To prevent new checks, we in all dealer centres have placed bank offices. At us now the buyer comes and pays money at once in bank.

Two years ago there was a new edition of the law on protection of the rights of the consumer. After that it became fashionable to return to the dealer the car after annual operation. In the Internet - communities the whole schemes as it is necessary to come in time were described, what piece of paper at the dealer to receive, as free of charge year to spend by the car, and then at the dealer to receive 1,5 prices for this car. To us tried to return such cars, but we essentially did not accept them. We participated in set of litigations, but have lost only one, and that in region where the judge was the friend of the one who has submitted the claim.

it is necessary to notice that among clients sometimes meet such which professionally are engaged vybivaniem from dealers of various discounts, concessions. We never paid attention to such requirements and we will not do it henceforth.

— But all - taki to react to claims of clients it is necessary …

— It is necessary. There is a blackmail and grinmejl, but there are also fair requirements of the client. And we accurately divide them. I distinctly see that inquiries of clients have exchanged recently. People now more oftenvajut abroad, see, how automobile business there works, and demand from us to correspond to the western standards. Business becomes more transparent, clients — more in a civilised way. To correspond to new requirements, it is necessary to change.

For example, for the last couple of years clients became much more exacting to terms of delivery of the car: if earlier delay in delivery of the ordered car on one - was perceived two weeks as norm now the client demands from the dealer bolshej clearness — and not only in when the car is put it, but also in that, how the expert of the dealer centre if there was a delay communicates with it. The client becomes more grounded in questions of protection of the rights — knows, where has the right to demand from the dealer fine payment. It is normal, and we understand that should correspond to changing requirements of the market.

For the decision of all questions at issue we have opened a hot line. All not without a sin, we are ready to recognise certain lacks of the work. But just similar hot lines allow to receive feedback and to correct something in the work. Cases of a delay of the car, generally speaking, can be at any dealer — we after all in turn depend on manufacturers and importers, and also from weight of factors. And in this situation sellers should not leave from the answer to the client, and at once inform on the measures accepted by us and ways of settlement of a situation.

— How you now have a development of a building direction, whether there is any communication between developer business and automobile?

— When we have begun reorganisation process at once development have allocated in separate business. As a matter of fact, de - jure now holding RRT to the company Rusfinstroj no relation has. At Rusfinstroja There is one big project in Great Novgorod where there is a building of the whole microdistrict on a site to 120 hectares. Also there is a project of cottage settlement in Shlisselburg. Communication between Rusfinstroem and RRT the following: the developer is engaged in building of all dealer centres of the company. T e. RRT has removed from itself a headache of dialogue with builders, the fitters, all allowing system. We are engaged in a car business, should adjust it so that the client was always happy, and a problem Rusfinstroja — under the schedule to build buildings when they are necessary to us.