‘There are no other auto vehicles’: Kazan car dealerships ‘captured’ by dealers of Chinese automotive industry
Experts' forecasts: “difficulties of translation from Chinese” in the field of trade in automotive equipment will be overcome in the next couple of years
As market participants reported to Realnoe Vremya, the premises of car centres vacated after the withdrawal of European brands have begun to be actively filled with products of the Chinese automotive industry. Eight car dealerships of official dealers of car suppliers from China are already operating in Kazan, and this is just the beginning. Read more about the “reorientation” of the dealer network, the specifics of doing business with Chinese suppliers, and the prospects of local car market in our material.
Sollers' reorientation
On Amirkhana Street, 28a, ST Kazan PLC was “registered”, the CEO and beneficiary of which is Vladimir Goykhman. In addition to ST Kazan, at the beginning of 2023, he registered another company in the neighbouring region for the sale of passenger cars and light-duty trucks — ST Ufa.
There is an official dealer of Changan and Tank on Orenburgsky Tract, EXEED dealers on Pobedy Prospekt and Moskovskaya, GEELY dealers on Sibersky Trakt, and Chery dealers on Dekabristov Street.
When multibrandedness is not a virtue
According to Yury Chikirov, the requirements of Chinese partners for the premises of car dealerships are generally standard: an area of 1 thousand to 2,5 thousand square metres, parking, a showroom, a room for a service station are mandatory. Since Chinese car dealerships “sit” on areas that were intended for the same purposes and met the requirements of Western partners, there are no problems with meeting these conditions.
The choice of the place of “landing” by dealers is also traditional — preference is given to the premises located near the entrances to the city, at the departure highways, with convenient access roads.
The new requirement, as informed sources told Realnoe Vremya on condition of anonymity, is only one thing: no neighbourhood with other brands on the territory of the car dealership. If earlier Chinese partners agreed to share the “living space”, now they resolutely refuse: “There may be car dealerships of other brands nearby, but trading in the same area with 'adjacent' brands, multi-brand is excluded.
“We should hardly expect a hype”
“There was a certain demand for premises for car dealerships a few years ago," says the head of the real estate agency A-Development, Murat Akhmerov. “Now there is no reason to talk about increased demand, nor about a plunge of this real estate market. Some of the car dealerships have already been repurposed for other purposes, some are now gradually being filled, including by Chinese brands.”
According to Akhmerov, the period of mass supply of these areas after a surge of car dealers' bankruptcies ended a long time ago, and it is possible that in the future there may again be a massive demand for premises for car dealerships:
“There are no problems with quality”
“In the Russian truck market, more than 50 percent is occupied by Chinese equipment," says the director of the National Agency for Industrial Information (NAPI), Tatiana Arabadzhi. “There are no other vehicles — even trucks, even cars, and Chinese cars are relatively affordable and on a par with Russian ones are massively present on the market.”
The interlocutor of Realnoe Vremya stressed that today's Chinese car industry is not the same that was imported to Russia a few years ago:
Pecularities of Chinese business
Tatiana Arabadzhi stressed that even if the foreign cars familiar to Russians return to Russia, the Chinese car market will no longer roll back, as it was, to the level of several percent — only a part of consumers will return to the old brands.
At the same time, now, according to her, there are a number of tangible problems related both to logistics and to the peculiarities of doing business in Chinese:
“Very often, two dealers are opening the brand in one average Russian city — as a result, if it's not Moscow, not St. Petersburg, both of them become uninterested in working there. And one brand can have several distributors, and sometimes the manufacturer divides different equipment between them. This is especially inconvenient in the segment of commercial trucks — we are used to when the entire model range can be purchased from one dealer.”
It happens, she noted, and even more fun: if a Chinese brand has not entered some city or region officially, cars can be imported by different importers, there is a kind of “leapfrog”, consumers may face the absence of an official service station with all the ensuing consequences. However, according to the expert, these problems will be solved within the next couple of years.