Falling sales, fewer visitors, as well as fewer cars in service centres; these are the first effects of a decline in the car industry for dealers in Romania.
Whilst in October last year most car dealers and importers reached their annual sales targets and overall sales exceeded year-start expectations, October 2008 is as full of records, but with negative effects over profit: discounts of 20-30%, financing conditions involving the payment of just half the car value, with the other half to be paid in a year, as well as downwardly revised targets.
"October sales were around half the level of July. In November, sales resumed their ascending trend, particularly after the new special offer was launched. Showroom traffic rose after the new moves, and so did customer interest," said Alexandru Pitigoi, general manager of Colina Motors. For November, Colina Motors projects sales of almost 150 Ford units, from 250 cars in July.
Volkswagen and Skoda dealer, Porsche Bucuresti Vest, is coping with a similar situation. "In October, the drop was by around 10-15% from the annual average," said Mihai Popescu, CEO of PBV1.
To boost showroom traffic and customer interest, dealers can organise events and promotions independently from importers. Colina Motors and PBV1 have cut their targets for this year amid the declines seen in the past months. The slight drop BDT Vest, Ford dealer of BDT Group, saw in October came amid the shrinking weight of customers opting for leasing.
Whereas in the case of car sales October brought one of the steepest declines in recent years, on the service operations side dealers are much more protected from negative effects.
Pitigoi said service operations hold a relatively low weight in overall revenues, but profit margins are much bigger than in the case of sales. In the case of PBV1 dealer, service operations account for 15% in turnover in the first ten months, and will rise by 30% in 2009, according to Popescu.
One of the factors behind the slower growth rate is the Bucharest car market having reached maturity. The lack of financing is one of the problems both people wanting to buy a car and dealers are facing. As new cars are no longer selling equally well, dealers are developing used car units.
Pentru alte știri, analize, articole și informații din business în timp real urmărește Ziarul Financiar pe WhatsApp Channels
