Car LADA brand for many years to be the most sold in the territory of Russia. What percentage of today AVTOVAZ on Russian car market? How does the leader of the Russian automotive industry will retain their positions? What are the challenges facing service and sales network AVTOVAZ? These and other topical issues to representatives of the corporate media, the press club of the Company’s broadcasting and the press said vice president of marketing, sales and service of OAO AvtoVAZ Vladimir Kuchay.
AVTOVAZ THE RUSSIAN MARKET
– Vladimir, what is to date fleet of LADA in the Russian market?
– In our country, has little more than 24 million cars. Of these, the Volga automobile fleet – more than 11 million. In the structure of sales in the first half of this year we have about 44% – this is the machine, gathered at the AVTOVAZ. But in addition, annually produces approximately 250 thousand cars on the basis of our body and engine. In fact, this is another thread the main conveyor. And if you add our brand cars, which are collected in Izhevsk, Syzran, Serpukhov and Naberezhnye Chelny, Russia is on the market, we have a share to 53%. In monetary terms, our share is about 30%. It is understandable that foreign cars are more expensive than our cars. But in our country and the structure of incomes is that wealthy people are not so much. And 40% do live on the limit of subsistence.
Russian politicians and journalists from time to time there are unflattering about our products, saying: let the case in AVTOVAZ situation and good, but: Is there any sense to provide incentives and invest some money in the plant, which produces”not the best cars in the world”? If you speak this way, then, probably, in our country do not make the best airplane in the world, not the best in the world’s refrigerators and television sets. So what, close all of the company, to sell oil and purchase of these products from landfills money – European, American, Japanese? By the way, but in terms of governance, we have that – the best in the world? ..
AVTOVAZ makes its cars to consumers who can buy them. By the way, the machines for 6 thousand dollars in the world does not make any more. This 47 thousand cars a year, we sell in the developed capitalist countries. Another 47 thousand of our cars bought each year in the CIS countries. And it also confirms their relevance and competitiveness. Therefore, I believe we need to revive national pride for its automotive, search for something good, that it is. Indeed AVTOVAZ independently, without the support of the state stood in the most difficult time. We work fast. We have a stable financial situation – I think it irritated many, and in that the main reason for attacking AVTOVAZ. By the way, so we talk to Moscow every month buys more than 12 thousand cars LADA. We sell 140 thousand in Moscow every year! I think that those who spoke poorly and wrote about AVTOVAZ, much less than the buyers.
– Can you predict how to change the market share of AvtoVAZ, say, ten years? After all, it affects our future and the future of our city …
– Of course, there are predictions about the development of the share of AvtoVAZ in the Russian automotive market, but they are closed.
You understand that all these elements of competition. I can only reiterate that our task – to keep their positions. Therefore, all plans, including the””Kalina, are positive. In the next ten years in Russia is projected to the market in approximately two million two hundred thousand cars per year. We claim about one million – one million two hundred thousand of finished vehicles for the domestic market, excluding exports.
– How AVTOVAZ is going to retain their positions in the Russian market?
– Our principle remains the same: the optimal balance of price and quality. For the price, we intend to remain at the lower limit of the possible. It is quite difficult: stay on the minimum prices that the quality of the vehicle meets the consumer. On the one hand, we will focus on people with low incomes and to keep the pricing terms of the most affordable cars in the 6 thousand dollars. And on the other – with improved quality and with the introduction of new technologies will develop further and offer the consumer a car secured another level. Of course, we shall be able to world standards of quality, but our car when it should be 20 percent cheaper than counterparts from Europe, Japan, Korea and other countries.
MARKET SPARE PARTS
– It is known that in a certain percentage of the sale of counterfeit parts. Will they declared war? After all, it is about reputation of our car.
– I recently said in his statement to the press that one of those parts, which are now on the market, products AVTOVAZ is 25%. And then the media went free comments about my speech. Therefore I wish to explain how in fact the case. The market of spare parts for our cars is estimated at 12-13 billion. AVTOVAZ now delivers 3.7 billion (for the domestic market – 3.1 billion of this amount). There are a number of objective reasons. Previously it was? AVTOVAZ supplies the market with almost 100% of parts, but this was as follows: all smezhniki supplying parts to the plant, and here they were distributed to the conveyors and spare parts. Today, all of our vendors produce and sell the parts individually. And you know that the cost structure of car components take up more than 60%. That is, by all objective characteristics of 60% of parts from smezhnikov comes on the market are not counterfeit. This high-quality components, certified AVTOVAZ – such as the details are supplied and the conveyor. By the way, delivering them to the market is very profitable, because the parts is more expensive than the piece that goes for a complete set of the conveyor. This means that even withdrawal from the production of some models can not affect the suppliers, because if it is economically advantageous – they certainly will provide details on the market for a particular model.
Another point – in the design of our vehicles have such details (for example, Italian engine Italian transmission in”classic”), which produce many producers in the world. These parts are interchangeable, they can buy and abroad. I mean, it is not a counterfeit product.
So it turns out that the counterfeit can be described only approximately 20% of spare parts, which are produced without permission, without legal registration rights. Unfortunately, we do not exist today, the powerful information technology to control the market. But the fight against counterfeit goods is necessary. To do this, hold a strong legal training and to include appropriate requirements in the dealership agreement, obliging dealers already on the ground to deal with these products. We need to organize a centralized supply of spare parts, creating a network of warehouses, which collected all the parts, including those that are produced by our suppliers. You need to detail, which require special conditions for the installation, and parts that affect traffic safety, there were only service network – as is done throughout the world. A retail chain should enter only the details, the installation does not require special skills, which the owner himself might change – it grills, lanterns, lights, wipers.
ATTENTION – quality and consumer properties
– How many times has increased the price of cars LADA 110 after the engine on the production volume of 1,6 l? How do you think of this sreagiruet market?
– The price of the car, the engine has increased by about 5000 rubles. But we believe that this is completely off improved consumer properties. The car has become more high-spirited, more powerful, with virtually the same fuel consumption. So a consumer, I think, will only be satisfied.
– How do you assess today the first results of the transition to a two-year warranty LADA Car?
– When in 2002 we faced a crisis of sales, then realized that not enough consider the needs and aspirations of consumers. All Western manufacturers have moved to two-to three-year warranty, but we stayed a year. We moved to a two-year warranty consciously, at the same time on AVTOVAZ work on a dramatic improvement in the quality. We understand that this is a common problem, it can not be broken. And we concluded: all”disease”of a car seen in the first five thousand kilometers, in the second year of operation of the car are less likely to break. In announcing the warranty period of two years, we, in fact, had in store for another year – until such time as the fleet of cars to double the guarantee. It happened in mid-2003. That year was, we could say,”laboratory”. And the 2004-th – have an exemplary, when the entire fleet on a biennial guarantee. I would note that we have received almost no increase in the cost of the guarantee. So, the work on quality, which was held at the plant, offset by the second year.
– Foreign manufacturers use many types of sales – in particular, on credit. What plans AVTOVAZ in this direction?
– The credit of this year will be sold to more than 250 thousand cars (from 600 thousand sold in the domestic market). For comparison: in 2002, the loan had been sold about 20 thousand cars in 2003-m – already about 150 thousand. For the plant in 2003 we also launched, in essence, a credit scheme – a program of 50”x 50”. She is popular and is working effectively.
It must be noted that there are dealers that are more than 50%, and sometimes almost 100% of cars sold through credit schemes. And in the dealership agreements AVTOVAZ strongly encourages its dealers to do it.
– What is the main challenge today in service and distribution network AVTOVAZ?
– The challenge is to create a consumer society, car owners, loyal to the manufacturer. In this sentence, from my point of view, the focus of the objective, which is put in front of the dealer network. Because at a certain advertising in certain investments, you can sell almost everything. But if a man sold a product that does not match his expectations, the manufacturer of this product, in my view, is doomed. Therefore, you need to be able to, first, to convince the buyer at the time of purchase, and secondly, during the operation to create such conditions that the man was happy with this brand, is pleased with the environment in which the vehicle is operated. And that if you want to change the brand and the producer, he realized that changing the entire infrastructure: service center, the system of credit, insurance, etc. Therefore, today’s service factory, which is responsible for, the challenge is to create an environment of operation. We must offer our customers a car and create the conditions for its operation, which largely correspond to their expectations and needs.