While the development of the Russian car market (and also tire sales) has been somewhat chaotic in recent years, the government and companies such as Rolf Group are optimistic about the future.
And that is good news for Kwik-Fit’s Russian partner and other tire retailers, too.
In February the Russia Trade and Industry Ministry forecasted a rapid recovery of the country’s automotive market in 2011, supporting suggestions that Russia is once again on track to become the largest car market in Europe. What’s more this is likely to have a positive impact on those retail chains such as Kwik-Fit’s partnership with Russian Rolf Group, White Service.
"We expect growth in 2011 to be 14.8%, reaching 2.19 million units of cars and light commercial vehicles," director of the ministry’s department for the auto industry Alexei Rakhmanov told the Interfax news agency. The ministry’s forecast is more cautious than the Association of European Businesses, which confirmed a 20% growth forecast for 2011 earlier in February after sales shot up 72% year on year in January to 127,564 units. Rolf Group, one of the country’s leading car dealers, forecasted sales of 2.23 million units in 2011. Rolf Group’s retail branch expects to sell more than 61,000 new cars in 2011, up 44% from 2010.
But while Moscow leads the country in per capita car ownership, "the regions are the future for every distributor," said Sergei Shchyorbinin, executive director of retail at Rolf Group. The company has 25 showrooms in Moscow and St. Petersburg, representing 10 of the leading international vehicle manufacturers. Rolf estimates that there are 307 cars per 1,000 people in Moscow, but only 233 cars per 1,000 people nationwide.
Shchyorbinin said the western part of the country has 56% of the population and 75% of the car dealerships, while the 44% of Russians who live east of the Urals make do with only 25% of the dealerships.
So what does this mean for the tire retail business? Rolf Group has been using “fast, universal and high-quality auto repair” as differentiators when promoting its White Service maintenance brand across the country. And just over a year ago in the middle of February 2010 Kwik-Fit announced that it was to enter into partnership with the Rolf group in order to deliver services.
By 2015, the White Service aims to have opened 450 new shops in “midsized cities” as part of the plan to expand into the regions and consolidate brand recognition as the “market leader in multi-brand, Western-style auto repair.”
However, it is worth pointing out that the 450 branch target is also a 10% downward revision. At the launch Rolf Group said it wanted to expand into 500 branches within the same timeframe. This is significant because Kwik-Fit signed a 10-year cooperation deal as part of its deal with Rolf Group and the executives behind this agreement will no-doubt want to see results that meet or exceed expectations. At the time of the announcement of the Russian cooperation last year Kwik-Fit representatives pointed out the attraction of the Russian market.
In comparison with the U.K., a larger proportion of Russian motorists choose premium tires, and the climate drives demand for both winter and summer tires, as in other northern European countries. (Tyres & Accessories)
