Get rid of drains

Due to the collapse of the ruble at the end of last year, the Russians urgently tried to save their savings by investing in expensive goods, including cars. A significant increase in the Russian car market in November-December was also provided by residents of neighboring Belarus and Kazakhstan, who bought cars in Russia because of the advantageous difference in foreign exchange rates. As a result, in the last month of 2014, car sales reached record levels in the entire history of our country's car market. However, the beginning of the coming year promises to be completely disastrous for car dealers: their warehouses are almost empty, and there are few who want to buy cars at new prices.

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“Considering that last year ended in excessive demand, the volume of balances in warehouses struck us, there wasn’t such a situation yet, ” complains Chairman of the Board of Directors of AvtoSpetsTsentr Group of Companies, President of the Association of Russian Automobile Dealers Vladimir Mozhenkov. - Today, some brands are not available at all, some brands still have a certain number of cars that are sold at the prices of last year. Now in warehouses throughout Russia 160-170 thousand cars of 2014 of release remain. ”

Due to the rush of customer demand in November and early December, the company's warehouses decreased compared to last year, confirms the head of the business department of Avtomir Alexey Ponomarev. For some brands, the warehouse decreased four times (for example, for Toyota and Volkswagen), for other brands it decreased less.

Finally, having disposed of the stocks accumulated over the past year, dealers began to take a more cautious approach to supply planning, trying to quickly respond to demand. “We have warehouses of 0.8 monthly sales. We bring cars to our stores as needed. In a period of ruble turbulence, it’s not very clear what to consider a regulatory reserve, ”said Dmitry Tsarev, CEO of Wagner Group, which sells Audi, Volkswagen and Skoda in St. Petersburg. - We plan to keep small warehouses. We focus on the sale of cars of local assembly. We have no shortage of cars, and we do not expect it. ”

In an uncertain market situation, automakers have become more loyal to dealers and do not set strict requirements for the implementation of the sales plan, as before. According to Vladimir Mozhenkov, many of the automakers began planning monthly or quarterly, and not as before - a year in advance. “Overstocking is unacceptable, financial statistics of the dealer network is important to us, ” confirms Daria Khrapova, Audi Sales Director for Russia. - In the current economic situation, the number of cars in dealers' warehouses affects their costs. We will make adjustments to production according to demand. ”



Sales are canceled

Meanwhile, despite the remaining dealerships in 2014, there is no reason to expect traditional sales this year . Moreover, not all last year’s cars can be bought at the same prices today, although their prices have not risen as much as the cars of the 2015 model year, which have already begun to appear in dealerships. At the same time, imported models are becoming more expensive, while the price tags for Russian-made cars are growing less significantly.

According to Dmitry Tsarev, today you can’t buy anything at the prices of 2014, but cars imported last year went up by 10-15%, which leaves the prices for these cars relatively attractive. “ The deficit will be on German-made cars, because they are unprofitable to sell, and the entire percentage of the growth of the euro cannot be laid down in the price - they won’t buy cars for that price, ” he said.

In the salons of Avtomir Group of Companies, SUV segment cars such as the Hyundai ix35 and Mitsubishi Outlander have become relatively scarce. In the passenger car segment, Volkswagen Polo, Hyundai Solaris, Kia Rio, and Skoda Rapid are still the most demanded. But Peugeot, Citroen, Ford can still be bought at last year’s prices. “Deliveries of new cars at 2015 prices are expected in January of this year, applications for them are accepted at our showrooms. We do not expect a significant shortage of cars in the first quarter, maybe the first half of 2015, ”predicts Alexei Ponomarev.

Deliveries of cars of 2015 for some brands have already begun to the Rolf Group stores, while for others (for example, almost the entire premium) they will go in the coming days. “The timing of the appearance of cars produced in 2015 differ for different brands and models. The fastest cars to appear in 2015 are those brands that are assembled in Russia. Foreign cars will appear later, delivery may take several months, ”says Tatyana Fornasova, head of the Rolf Premium division. - Orders for exclusive configurations are also taken into production. For example, Porsche, Land Rover, Toyota and Lexus take orders for production in March. But delivery times will be different: Porsche will reach Moscow in late April, Land Rover in May, Toyota and Lexus at the end of June. ”

New deliveries of Russian-made cars at 2015 prices are expected in January, European - in February, Japanese and American - a little later, confirms Vladimir Mozhenkov. “Prices, depending on the brand, have so far risen by 10–20%. Buying a car is now more profitable than, say, six months later, because this is just the first wave of a rise in price, ”he warns.



Car shortages are not threatened

According to dealers, despite the fact that car stocks in their warehouses are much lower than usual, this number of cars is quite sufficient taking into account current demand, which was largely satisfied at the end of last year. So, in January, the flow of customers decreased by about 40% compared to the previous month, market participants say.

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“We can say that in 2015 we entered with stocks several times less than last year. At the end of 2014, almost all cars were sold, last year's cars were almost gone. For example, Range Rover and Range Rover Sport are now out of stock. A small number of Discovery, Freelander, Evoque and Jaguar cars remained, ”says Elena Starikova, CEO of Artex (official dealer of Land Rover and Jaguar). - But the situation in the beginning of 2015 cannot be called a deficit, since the New Year’s hype has ended and demand has fallen. We expect that we will close the existing demand with cars available and those that will begin to be delivered in the second half of January. ”

“To date, the stock in Avtomir is optimal given the slowdown in consumer activity, ” says Alexey Ponomarev. “Throughout the company, the speed of concluding contracts over the past thirty days is such that even if there are no new deliveries, then having a warehouse is enough for more than two-month sales, ” he believes.

The Rolf Group of Companies, which, thanks in large part to the rush demand for cars in November-December, was once again able to set its own sales record, is assured that the company has all the running models in its stores. “Although there was a real boom in our car dealerships at the end of the year, proper procurement planning helped us avoid shortages. Now we have a sufficient number of commercial vehicles for all brands, taking into account current sales plans. There aren’t only niche and exclusive models that were previously supplied by customer’s pre-order, ”says Tatyana Fornasova.

There is no shortage of goods in the salons of AvtoSpetsTsentr Group of Companies, Vladimir Mozhenkov echoes it. “Orders for cars were both accepted and accepted, if any particular configuration or brand of car is not in stock, then we issue it to order, ” he says.

Meanwhile, the surge in demand for cars, observed due to the collapse of the ruble, already at the end of the year almost came to naught. As forecasted by the Association of European Businesses, by the end of 2015, sales of passenger cars and light commercial vehicles will fall by 24% to 1.89 million vehicles sold, with the main collapse occurring in the first quarter.

“Now the situation is uncertain: a lot depends on the policies of importers and on whether the government will be ready to stimulate the industry. The recycling program mainly supports the sale of low price models. State subsidizing of rates on car loans could be a more effective support measure for car sales in a wide price range, says Tatyana Fornasova. - It is also important to understand what policies car manufacturers will adhere to. Both prices and sales plans matter: revaluation of the market will lead to overstocked warehouses, and underestimation will lead to a shortage of running models, which is a real danger, as many brands have revised quotas for Russia downward. ”

According to Alexei Ponomarev, his company intends to respond promptly to changes in trading conditions that importers will offer. “It is necessary to monitor the changing conditions for the supply of cars and mutual settlements for them, to control the amount of margins set by manufacturers, the changing conditions of bonuses, ” he explains.



What will we win with

With the continued decline in demand for new cars, Russian dealers are trying to make money on services, trade-in and sales of used cars. “According to our expectations, sales in 2015 will decrease by 35–40%. About the same drop was in 2009, in which we focused on after-sales service. This year, Artex will also focus on the work of the service station and the implementation of additional services, says Elena Starikova. - The direction of trade-in in our dealership depends on the sales of new cars, and since demand for them will decrease, it is difficult to expect a large increase in sales in the used car segment. However, the trade-in direction is quite promising, and we will try to develop it. ”

According to Dmitry Tsarev, in the face of falling traffic in showrooms, the direction of services, on the contrary, shows enviable stability, and sales of used cars at Wagner expect a significant increase even against the backdrop of more than 50 percent growth in 2014.

Rolf Group of Companies is ready, including for the worst-case scenario, involving a collapse of more than a quarter in the market. “The company has done a lot of work to optimize business processes and reduce costs. We have completed all large-scale investment projects. For many years, Rolf has worked to ensure that after-sales service revenue covers most of the costs of each auto center, and now we can survive through the service. We also develop sales of used cars: in 2014 we managed to increase them by 36.3%, ”says Tatyana Fornasova.



According to Alexei Ponomarev, used car sales certainly represent a great development potential, but we must not forget that in the field of new car sales there are reserves for a successful business - for example, the use of multi-brand car dealerships.