common economic space russia – eu, november 16, 2006
TRANSCRIPT
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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
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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
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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
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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
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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%
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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
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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
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Common Economic Space Russia – EU, November 16, 2006
T’umen
• Sales Volume : 1540 units
• $ 2.7 mils
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Common Economic Space Russia – EU, November 16, 2006
Moscow
• Sales Volume: 3303
• $ 11.0 mils
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Common Economic Space Russia – EU, November 16, 2006
Saint Petersburg
• Sales Volume: 3422
• $ 3.5 mils
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Common Economic Space Russia – EU, November 16, 2006
Perm
• Sales Volume: 1389
• $ 3.5 mils
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Common Economic Space Russia – EU, November 16, 2006
Nizhny Novgorod
• Sales Volume :417
• $ 4.2 mils
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Common Economic Space Russia – EU, November 16, 2006
Omsk
• Sales Volume: 458
• $ 4.5 mils
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Common Economic Space Russia – EU, November 16, 2006
Samara
• Sales Volume:1599
• $ 2.2 mils
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Common Economic Space Russia – EU, November 16, 2006
Stavropol
• Sales Volume :1439
• $ 4.5 mils
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Common Economic Space Russia – EU, November 16, 2006
Pyatigorsk
• Sales Volume: 400
• $ 1.8 mils
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Common Economic Space Russia – EU, November 16, 2006
Neftekamsk
• Sales Volume: 320
• $ 1.6 mils
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Common Economic Space Russia – EU, November 16, 2006
Almetievsk
• Sales Volume: 250
• $ 1.5 mils
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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
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Common Economic Space Russia – EU, November 16, 2006
A New Potential Industry
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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
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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
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Common Economic Space Russia – EU, November 16, 2006
Ford in Russia
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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
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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
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Common Economic Space Russia – EU, November 16, 2006
Ford Investments in Russia
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Common Economic Space Russia – EU, November 16, 2006
Ford Investments in Russia
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Common Economic Space Russia – EU, November 16, 2006
Ford Investments in Russia
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Common Economic Space Russia – EU, November 16, 2006
Ford Training Centre/ Office Plans
Opening – Spring 2007
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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
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Common Economic Space Russia – EU, November 16, 2006
Obstacles
“There is no man or woman who fails if is only persons who stop trying”
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Common Economic Space Russia – EU, November 16, 2006