Vyacheslav Zubarev, TTS: ‘All signals demonstrate that this year automobile market won’t feel better’

Car market of Russia will decrease by 15%

In 2015, car market of Russia fell by 36%. 'I think this year fall will be maintained. But, undoubtedly, it won't too sharp. It cannot be applied to the whole year according to the data of January. But all signals demonstrate that car market of the country won't feel better than in 2015,' Zubarev stated.

According to his forecast, in 2016, the volume will shrink by 10-15% more. The percentage will depend on the general economic situation. 'When will it all end? Generally speaking, car market is a litmus paper. The car market of Russia will liven up and grow when the economy goes up and when people's incomes increase,' the head of TTS.

Zubarev told that there are no specific problems: 'The economy is just falling and stagnating. People start to spend less and economize. And spending on purchase of car presupposes significant cost for most of the clients.' When incomes fall, many people decide to refuse such a purchase.

Generally speaking, car market is a litmus paper. The car market of Russia will liven up and grow when the economy goes up and when people's incomes increase

'As a rule, car is purchased as a renewal. However, somebody prefers to use an old car, somebody prefers to buy a cheaper model. But what does 'prefer' mean? They don't have a possibility,' Zubarev sadly grinned.

And again, due to lack of money, many people start to economize on service. If earlier people could pay for quality and reliability of service, today car owners have only one choice: where is a cheaper place for car repair?

Prices for cars will only grow

Forecasting the price change in the market, the head noted that it was difficult to answer this question because the answer would distress the readers of Realnoe Vremya: 'Prices will grow. Even if nothing changes, prices will grow'.

The cause is in the falling ruble. Every, even Russian, car has quite a big dollar component. Its price in dollars is the same. However, the very American currency has been many times higher.

'Today many car producers in Russia sell cars at a loss. It cannot be like this any more, of course. Ruble will gradually increase, without doubt,' Zubarev said. He also explained that it was cheaper to buy a car in Russia than abroad for the first time. Earlier people preferred to drive them from Europe in spite of customs duties.

Nowadays the market faces a difficult period of the fight for survival. Zubarev thinks that dealer's bankruptcies and exit of companies are inevitable.

Today many car producers in Russia sell cars at a loss. It cannot be like this any more, of course.

TTS, in turn, ended the year 'satisfactorily for the current situation,' Zubarev shared. The fall in sales was lower than the average indicator in the market. The company also managed to increase its share and preserve break-even. But Zubarev still is not delighted with the client service, 'When clients visit us, they don't pay attention whom they are speaking to: an employee of the shop or service'.

Sharp dive of Russian car industry

Car industry of Russia was also mentioned. 'I cannot give an unbiased opinion because I don't know the situation on the inside. For instance, we don't work with GAZ,' Zubarev warned. However, he expressed his opinion about the work of AvtoVAZ.

To start with, the head of TTS pointed out the achievements of the enterprise: improvement of model line and quality of cars. 'But some mistakes were probably made as well. For me, it is not understandable why prices for VAZ cars grew faster compared with overseas brands. It might seem that the import component was smaller, but prices were increasing.

According to my observations based on publications, in addition, AvtoVAZ managed to earn a serious loss. It seems that there were some mistakes in the improvement of effectiveness, economy of resources and correct distribution,' the businessman concluded.

As Zubarev opines, the enterprise built its pricing policy of new cars incorrectly: 'Even a good, quite a good car won't be purchased for an overcharged price'.

Korea instead of USA

Kia and Hyundai occupied the main part of the free space after when General Motors left the Russian market. 'All bit this pie or, more precisely, a slice, of course. But the Koreans got the lion's share of it.'

Zubarev noticed that today the car industry of China doesn't have a brand that would burst the market

It was informed in the media about the success of Chinese cars on the Russian market. Nevertheless, Zubarev noticed that today the car industry of China doesn't have a brand that would burst the market. He additionally explained that it is difficult to comment this issue on the grounds that TransTechService doesn't work with Chinese brands.

Zubarev clarified that Chinese car companies don't have a long-term strategy. There are situational solutions of problems that are not suitable for TTS in terms of ideology. 'We would not like to start to sell and have no opportunity to offer service and go somewhere quickly. But we understand that China in general and the Chinese economy are going up. Chinese cars will have their part in the Russian market sooner or later,' Zubarev forecasts.

Unique used cars

TTS adopted a serious programme on used cars sales improvement three years ago. The company achieved the first 'palpable result' last year: in 2015, TTS took the third place in Russia.

'Why did we start this activity? Look, the whole world is doing it.' Zubarev thinks that it is a need of the society, it is a necessary work. According to his work, used car markets is like a wild.

'Do you remember how we all used to go to markets to buy something in the 90s. Then retail chains appeared. But we continued going to markets because it was cheaper. Having got bad goods several times, we started to go to shops.' In Zubarev's opinion, the situation of used car sales will be the same.

I think that our future lies with civilized used car sales. It means that there is a growth point.

'There is no such thing like Russian used car market (I mean civilized regions such as Europe, America and many developing countries). When it is done via official dealer, consumer is protected. We have a legal responsibility towards our client. If some breach is revealed, he or she has somebody to come to.

Secondly, we check the good title. Thirdly, the technical state of a car. I suppose we define it better than a majority of clients. We have a policy – I think our employees follow it – to tell about the state of a car frankly and honestly. It is probably also good for the government because we are taxpayers. I'm now sure whether all intermediaries of the market do so.

'I think that our future lies with civilized used car sales. It means that there is a growth point. We defined it a long time ago, worked well, so, we have results,' the guest of the editorial stated.

Looking at the indicators of 2015, TTS sold 40,000 new and 14,500 used cars. The company is going to increase this share. We had been using trade-in. Now a procedure of buyout from those who wish to sell is planned to be adopted. Trade-in based on trade-in will be a new direction.

Those who wish to buy a car in TTS in exchange for an old one can bring us any car. If a client is going to sell the car to the shop, the car should 'represent any value'. The company won't buy a car in a bad state.

'Used car is a unique thing. If a new car can be compared – there is a configuration, certain colour… We a priori think that they are almost identical. As for a used car, we have 2,000 cars on the site – and they are all different. If I bought a car, I would go to a place where there would be a large amount of them.'