common economic space russia – eu, november 16, 2006
TRANSCRIPT
Common Economic Space Russia – EU, November 16, 2006
Common Economic Space Russia-EU
“Success Stories and Obstacles”
Henrik Nenzen
-Chairman Automobile Manufacturers Committee ,AEB
-President Ford Motor Company ZAO
Common Economic Space Russia – EU, November 16, 2006
Automobile Manufacturers Committee
European Brands
Alfa Romeo Opel
Audi Peugeot
BMW Porsche
Citroen Renault
Fiat Saab
*Jaguar Skoda
Lancia *Volvo
*Land Rover VW
Maybach MINI
Mercedes-Benz
____ OtherCadillac Jeep Chevrolet Lexus Chrysler MazdaDodge Mitsubishi*Ford Nissan Honda Subaru Hummer ToyotaInfiniti
•33 Global Cars and Commercial Brands
•Support the development and growth of the Automotive Sector in Russia
•Support fair business rules
Common Economic Space Russia – EU, November 16, 2006
Automobile Manufacturers Committee
• Monthly meetings- Board of Directors
• 8 Working groups
– Automotive Regulations/Homologation
– Customs
– Statistics
– Used Vehicles
– Fuel Quality
– Marketing/Exhibitions
– Customer Legislation
– Public Affairs
Common Economic Space Russia – EU, November 16, 2006
Automotive Industry Success Stories
• Industry sales growth
• Dealer network development
- Sales/ service/ parts/ retail finance
• Investments in manufacturing plants
- 7 in operation
- 6 planned
• Vehicle Homologation Harmonization EU-Russia.
Potential Future Successes
• WTO
• Establishment of a effective used vehicle sector
• Clean emissions/ Fuel Quality and Vehicle Safety
Common Economic Space Russia – EU, November 16, 2006
Strong Growth 2000-2006
2000 2006 Projection
1,100,000
1,750,000
4%
49%
- Non-Russian Brands
+59%
+1830%
Common Economic Space Russia – EU, November 16, 2006
Growth Factors
• Low ownership rates
• Disposable Income up
• Retail finance break through
• Total Equation – low price Total Value
+
Business Environment
• Stable political situation
• Property / land ownership rights
• Green channel introduction
• Personal Income and Company Taxation
Common Economic Space Russia – EU, November 16, 2006
Dealer Network Development
Ford Example • November of Dealers - 2000 17 2006 134• Employees - 2000 510 2006 13.400• Training- 7.340 Student days in 2006.Latest Global Standards Transfer EU-Russia
- Customer Care processes and standards - Technical
- IT - Sales - Financial - Employer retention/ motivation
- Buildings and Equipment
Common Economic Space Russia – EU, November 16, 2006
T’umen
• Sales Volume : 1540 units
• $ 2.7 mils
Common Economic Space Russia – EU, November 16, 2006
Moscow
• Sales Volume: 3303
• $ 11.0 mils
Common Economic Space Russia – EU, November 16, 2006
Saint Petersburg
• Sales Volume: 3422
• $ 3.5 mils
Common Economic Space Russia – EU, November 16, 2006
Perm
• Sales Volume: 1389
• $ 3.5 mils
Common Economic Space Russia – EU, November 16, 2006
Nizhny Novgorod
• Sales Volume :417
• $ 4.2 mils
Common Economic Space Russia – EU, November 16, 2006
Omsk
• Sales Volume: 458
• $ 4.5 mils
Common Economic Space Russia – EU, November 16, 2006
Samara
• Sales Volume:1599
• $ 2.2 mils
Common Economic Space Russia – EU, November 16, 2006
Stavropol
• Sales Volume :1439
• $ 4.5 mils
Common Economic Space Russia – EU, November 16, 2006
Pyatigorsk
• Sales Volume: 400
• $ 1.8 mils
Common Economic Space Russia – EU, November 16, 2006
Neftekamsk
• Sales Volume: 320
• $ 1.6 mils
Common Economic Space Russia – EU, November 16, 2006
Almetievsk
• Sales Volume: 250
• $ 1.5 mils
Common Economic Space Russia – EU, November 16, 2006
Foreign Direct Investments- 6 Manufacturing Plants within 3 years.- Decrees 166/566 excellent support with double effect: also for development of auto components manufacturers.- Better opportunity for Russian Manufactures due to components supply improvement- Sales of locally produced foreign brands.
118000
735000
1058000
0
200000
400000
600000
800000
1000000
1200000
2005 2008 2010
Common Economic Space Russia – EU, November 16, 2006
A New Potential Industry
Common Economic Space Russia – EU, November 16, 2006
A New Potential Industry
Used Vehicles Trading trough Official Dealers
New VAT regulations required – allow dealers to sell Trade-Ins without VAT (European practice)
Advantages
Government
• Transparent business
• Higher employment
• Safer cars on the road
• Higher VAT revenues
• Dealership investments
Customers
• More convenient
• Safer cars
• Warranty on used vehicles
Manufacturers/Dealers
• Higher sales of new cars
• Profit opportunity
• Service work
Common Economic Space Russia – EU, November 16, 2006
AEB – Fuel Quality Improvement Plan
AEB agreement with 1 or 2 oil companies
– The oil company guarantees fuel quality at filling stations
– AEB members recommend all customers to use fuel only from selected partner (s)
– Independent organization checks fuel quality levels
Common Economic Space Russia – EU, November 16, 2006
Ford in Russia
Common Economic Space Russia – EU, November 16, 2006
Ford Growth in Russia
1416 4358 6669
39237
120000
20712
60564
0
20000
40000
60000
80000
100000
120000
140000
2000 2001 2002 2003 2004 2005 2006Plan
Common Economic Space Russia – EU, November 16, 2006
Ford Growth in Russia
2000 2006
Turnover $17 mils $2.0 bils
Parts Sales $ 4 mils $66 mils
Number of dealers 17 154
Ford Ranking 12 1 projected
Focus №1 Nameplate (foreign brands) – 3.5 years
Fusion №1 Small car in 2006
Transit №1 Among medium commercial vehicles
Common Economic Space Russia – EU, November 16, 2006
Ford Investments in Russia
Common Economic Space Russia – EU, November 16, 2006
Ford Investments in Russia
Common Economic Space Russia – EU, November 16, 2006
Ford Investments in Russia
Common Economic Space Russia – EU, November 16, 2006
Ford Training Centre/ Office Plans
Opening – Spring 2007
Common Economic Space Russia – EU, November 16, 2006
Russia - One of Top Three Automobile Growth Markets in the World
• Excellent framework
• Selected areas to be addressed
• Common rules and framework benefit both EU and Russia
Common Economic Space Russia – EU, November 16, 2006
Obstacles
“There is no man or woman who fails if is only persons who stop trying”
Common Economic Space Russia – EU, November 16, 2006