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- Not everyone will survive: every tenth car dealer may leave the market by the end of the year.
Not everyone will survive: every tenth car dealer may leave the market by the end of the year.
About 10% of dealerships in Russia may close by the end of the year. This is due to falling sales of new cars, expensive loans, as well as internal competition between car dealerships, according to the association of Russian Automobile Dealers (ROAD). In addition, Russia is facing a sharp aging of the fleet. Details can be found in the Izvestia article.
The dealer next door
With falling sales of new cars and still high loan rates, the number of car dealerships in our country may decrease. This was announced by Alexey Podshchekoldin, President of ROAD, during a press conference on the results of the first half of the year in the automotive market.
— The car market is falling, in these conditions it is very difficult for dealers to maintain margins. In addition, in some cases, car dealerships of the same brand are located literally on neighboring streets, and they are forced to compete with each other. Under these conditions, according to our forecasts, the number of dealerships in Russia may decrease by 10% by the end of the year," he said.
As an example of an "excessive" neighborhood, he cited the situation with the Chery brand car dealerships, of which there are currently 36 in Moscow. Even for the capital, such a number of dealers of one brand is excessive, the head of the ROAD believes. As a result, they are forced to compete with each other in the struggle for a buyer, Alexey Podshchekoldin notes.
Another important reason that can lead to a decrease in the number of dealerships is the very high loan rates, according to the ROAD. Alexey Podshchekoldin said that now the cost of opening one car dealership is about 500 million rubles. In the vast majority of cases, this money was borrowed, he noted.
— Taking into account the current high rates on borrowed funds, approximately 70% of dealers who repay these loans operate with zero profitability, — said the president of the ROAD.
Taken together, all these reasons may lead to the fact that the number of car dealerships in Russia will decrease by the end of the year, he stated.
At the beginning of April, according to the analytical agency Autostat, there were 3,082 "passenger car" dealerships in our country and 4,516 dealer contracts with automobile brands. Since April last year, the number of contracts has increased by 20% (+752). At the same time, the number of car dealerships increased by only 2% (+54).
Car owners won't notice
First of all, small brand dealerships, which have the largest drop in sales, may leave the market, says Igor Morzharetto, partner of the Autostat analytical agency. And this will mainly affect sellers in the regions, he believes.
— The withdrawal of 10% of dealerships from the market will not have a serious impact on the consumer. A person will either buy a car at another dealership, or purchase a car of a different brand, or if a brand whose dealer is not in his city is fundamentally important to him, he will go to a neighboring city," Igor Morzharetto told Izvestia.
The expert does not see any special difficulties with car maintenance either. Many car owners already prefer to undergo maintenance and repair of the car in unofficial technical centers, he notes.
Dealers themselves are to blame for the fact that customers treat them with distrust, says Anton Shaparin, vice president of the National Automobile Union. They lost it when they started, and some continue even now, to sell conditional "mats" along with the car for 300 thousand rubles, that is, to impose services, he notes.
— The main problem for dealers now is the high key rate, which makes car loans inaccessible to most buyers. The question is not even that this reduces the number of cars sold — dealers have not earned much on the cars themselves for a long time. For them, it is more critical to reduce the number of car loans issued, the dealer commission for each of which is 8-10%, as well as insurance, for which the commissions are even higher," Anton Shaparin told Izvestia.
Aging machines
Another problem that the president of the ROAD voiced at the press conference was the active aging of the Russian fleet. According to Alexey Podshchekoldin, the average age of a car in Russia is now 16.5 years old. Ten years ago, in May 2015, according to Autostat, it was 12.4 years old.
The head of the ROAD noted that the share of passenger cars older than 10 years in Russia has reached 72%. At the current rate of new car sales, in five years, 80% of the fleet will be models older than 10 years, while half of the cars will be older than 20 years, he predicts.
— In order for the fleet to stop actively aging, it is necessary that at least 3 million new cars are sold annually in the Russian Federation. This should be a goal at the state level," Podshchekoldin said.
The problem of an aging fleet exists, and it is very serious, Maxim Kadakov, editor-in-chief of Za Rulem magazine, agrees. To stop this process, the number of new cars bought by Russians should be significantly higher than the current level, he notes.
— Only in order for the average age of a car in the Russian fleet to be fixed at the current level, its annual "replenishment" with new cars at the level of 2.3–2.5 million units is needed. If we talk about reducing this age, then we are already talking about 2.8–3 million new cars annually.
Переведено сервисом «Яндекс Переводчик»
