|   ARMENIA'S CAR MARKET IS GROWING IN BOTH QUANTITY AND QUALITY
Interview with manager for communications, marketing expert of Armenia Lada closed JSC Karen Nalchajyan 1. How was 2005 for Armenia Lada, was it better than 2004 and where did you have the key progress? Last year we increased our sales and improved our services. Our success is due to competent management and constant improvement of professionalism. 2005 saw very good progress on the market of VAZ-10 and -12. One more achievement was the improvement of the system of car import into Armenia. If before 2005 Armenia Lada transported cars in convoy, last year it started trailer operations. This allowed to reduce the run from 2,000-3,000 km to 400 track ones. Besides, we began importing cars in big lots to avoid long queues for them. 2. How did the market change in the last year and what tendencies did you have in 2005. Which cars were more in demand? Can you give the rough picture of the present car market of Armenia: which makes take which part of the market and why? In the last year the car market has changed not only in quantity but also in quality. People have began buying more expensive foreign makes. Leading in the world top five are Japanese cars. The same can be seen here in Armenia. Given the peculiarity of the country and the poor quality of its roads, most popular here are now landrovers. Our market experts will finish their survey of the market in some 1-2 months, but already today we have some preliminary figures. The most sold foreign car in Armenia is Nissan, represented in the country by official dealer Muran. Besides being comfortable and stylish, Nissan is as durable as German cars. Its units are adjusted for each specific market. In 2005 Muran sold 150 cars, while unofficial sales were trice as big. Following Nissan are French Renault and Puegeot, then come Vokswagen, particularly Touareg, legendary Golf and Passat. Also in demand are Ford, Skoda and classical Mercedes, BMW and Audi. 3. How successfully is Lada Kalina being sold in Armenia? Aren't car lovers losing interest in Russian cars, what was the tendency last year? Even though Russian cars still have a big place on the Armenian market - due to low prices and Soviet-time traditions and consumer habits - they are beginning to lose it to foreign makes in the segment of cheap cars. When the difference in price between a Russian car and a foreign make comes down to 20% and there is, as a rule, an on-credit purchase opportunity, many begin to think which one to buy and often prefer the latter - especially as VAZ is now growing in price. Rivals to Russian cars in Armenia are increasingly Renault, Skoda, Puegeot. As regards Lada Kalina, last year Armenia Lada imported three demo cars to see the demand. They were exhibited in the company and, according to the preliminary comment by consumers, will enjoy high demand in the country. The new Lada is one of the most successful price-quality concepts of AutoVAZ and will be put up for general sale in Armenia as early as Mar 2006. 4. How developed are the official and "gray" markets of spare parts in Armenia. Who supplies spare parts besides the official dealers, from where and of what quality? The market of spare parts is bigger than the car market. It has official and "gray" sections. But for all its bigness, this market cannot meet the quality demands. One can buy factory "original" spare parts only from official dealers. The spare part market is not developed - sold there are often uncertified goods of dubious quality, imported from Russia, Turkey and United Arab Emirates and sold in Armenia in small shops. The "gray" units are produced by small firms, but they are never used in car assemblage. 5. What do you think about the secondary car market in Armenia? Many second-hand cars have been brought into Armenia from Europe, Georgia and UAE in the last years - among them very many high-jacked or damaged cars, later repaired and sold as new. In Lithuania they buy damaged cars in trailers and repair and sell them to third world countries. Many of them have a "dark" past. For over a year Karkomauto company has been trading in worn cars to put the market in order and to make it a place of civilized commerce. The company gives a guarantee for the worn cars its sells and, even more, sells them on an installment basis. Credits are issued for cars produced no earlier than 1993, with their cost starting from $4,000. The older the car the bigger the prepayment. Trade-in is one more globally-used mechanism of civilized commerce - you give your car as a prepayment for buying a new one. See for the company's services on www.karkom.auto.am. 6. What are the prospects of the Armenian car market development? The key prerequisite for the car market further development is the improvement of the banking system - something that makes cars more affordable. 70%-80% of Armenia Lada's sales are due to automobile crediting - a proof of developing middle class with stable good income. The terms of the crediting have been strongly improved in the last years. If in 2003, when the opportunity to buy a car on credit first appeared, the prepayment was 50% and the interest 30%. Now the prepayment is 20%, the payment period is 4 years and the interest 18%. And we are already considering prolonging the payment period till 5 years and reducing the prepayment and the interest to 10% and 12%-13% respectively. In automobile crediting Armenia Lada cooperates with almost all the banks of Armenia and makes the market on its own. RUSSIAN MODELS IN THE LEAD AS TO SALES VOLUMES IN MARKET OF NEW CARS IN ARMENIA
He says that the share of Russian new cars is some 80% of the sales volume, and import of these cars to Armenia has been growing for the last several years. In 2004 Armenia Lada sold 2,500 cars, which is 20% more than in 2003. The Director General explained the demand for new Russian cars by the relatively low prices, accessibility and cheap spare parts, as well as by guarantee service. In the current year, some 3,000 cars made by "VAZ" are to be sold. Besides the traditional Lada "07" and "010," the innovation "Chevi Niva" produced by "Vaz" jointly with General Motors is well sold in the market. Though the spare parts of the car has not been changed, the design of "Niva" has become European and more comfortable. The price of this car is high enough, fluctuating between $12,000 and $13,500. During the last year, some 200 models of "Chevi Niva" were sold, which is rather good indicator, taking into account the high price for the car, Shahmuradyan thinks. He pointed out that a new "Chevi Niva" with an engine of "Opel" would be on sale from Aug 1.
As regards the foreign models, the situation is quite opposite here. Armenian car amateurs prefer used cars for the same price as the new Russian models, Director General of Armenia Lada thinks. He explains the given circumstance by the fact that buyers get more comfort for the same price, but they spend much more for service of old foreign models. These cars are imported by private persons from Germany and the UAE and no one provides quality guaranty. The cars in Armenia are 7-10 "year old" in average. It is a very bad indicator from the point of view of ecology for such country as Armenia. The use of such cars abroad is banned. Shahmuradyan assured ARMINFO's correspondent that new Russian cars of "AvtoVAZ" are with injector engines; and they meet ecological standards more than "10-year old" foreign cars. DEMAND FOR JAPANESE "NISSAN" GROWS IN ARMENIA
It is forecasted that this year the sale volume will grew to 120-150 cars, he says. These cars are cheaper than German cars but not less qualitative. The most popular models are "Nissan Maxima" and "Nissan Altima." Among "Nissan" subtypes are broadly presented Murano, "Patrol," "Armada" and other models. The most expensive are "Nissan Infinity" cost some $74,000. 5-6 such cars are sold annually. The official representative of Nissan in Armenia is "Muran." -M- "FORD" AUTOMOBILE SALON AND SERVICE CENTER WILL OPEN IN YEREVAN IN SEPT-OCT 2005
He says that "Ford" representative in Armenia is a recently established LTD "Fora." The first supply of these cars will start within the coming days. Besides the well-known models, a new "Ford Focus" will be imported in Armenia. This model was presented at the end of 2004. This car is well advertised in Europe. Its price starts from $16,000. By the end of 2005, some 50-60 cars of this model are to be sold, Shahmuradyan forecasts. |
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For the first time in Armenia market experts are trying to assess the situation on the car market and to forecast its further development. Cheap foreign cars now cost almost as much as Russian vehicles. The automobile crediting system is developing.
YEREVAN, JUNE 14. ARMINFO. As to the sales volume in the market of
new cars in Armenia, Russian models are still in the lead. As regards
foreign cars, used ones are often bought. Director General of the
CJSC Armenia Lada Ashot Shahmuradyan told ARMINFO. The company is a
exclusive representative of "AvtoVAZ" in Armenia.
By the end of 2005, Armenia Lada will present a new car to the
Armenian market, that is, Lada Kalina, which is the last achievement
of "VAZ." The serial production of this car was launched in the
current year. It will be on sale in the Armenian market already in
September. Shahmuradyan called it qualitative and relatively
inexpensive as its price will be lower than that of Lada "010" and
Lada "015." He forecasts that some 200 such cars may be sold by the
end of the 2005. There is another important fact that Lada Kalina is
a small- capacity car and it will be practical enough on the
overloaded roads of the Armenian capital. However, the number of
cars in the Armenian towns is still small. In this connection,
Shahmuradyan forecasts a stable growth of the car market in the
country for the coming two years. The share of Armenia Lada is 30% of
the whole import of Russian cars into the market of Armenia.
The second big importer, the official representative of "Gorkiy
avtozavod" is the Armenian company "Karkomavto." It imports "Volga"
models in Armenia and microbuses "Gazel." Despite the year-by-year
rising prices for "GAZ" cars caused by the rise of prices for metal
and parts, the quality of these cars is also growing, Shahmuradyan
thinks.
YEREVAN, JUNE 14. ARMINFO. An automobile salon and "Ford" service
center will open in Yerevan in Sept-Oct 2005. Director General of
CJSC Armenia Lada Ashot Shahmuradyan informs ARMINFO.