Does the customer need a “FOLK CAR”?

The idea of the people’s car available to broad layers of the society time after time emerged in different countries and practically on all continents. German “Wolkswagen”, French “Renault-4”, Argentine “Zulu-Frau”, English “Austin-Mini” and, of course, the great-grandpa of all modern bantam cars — legendary “Ford-T”. Recently the idea of invention its own car has also appeared in Belarus. To tell the truth, experts see a great deal of ridges on the way of new Belorussian projects on the cars’ assembly
So-called “Racers” are on the roads

The Belorussian market of new cars is growing like a weed today. A record number of new foreign-made cars (10 thousand) was registered in Belarus last year. One more new record is expected to see in 2007. According to the data of Automobile Association only in the first quarter of this year more than 3, 3 thousand of new foreign-made cars were registered. And it is in two with a half times more in comparison with the same period of 2006. As analysts say, it is first of all connected with the growth of real incomes of the population and the restrictions of possibilities for investment. The immovable property is the most attractive object for investing but the majority of Belorussian people can’t afford it, the demand for bank deposits and securities is not very high. As a result, the most popular way of so-called money storage is the purchase of household appliances or cars. Moreover, Belorussian people more and more buy foreign-made cars.

The position of home automotive industry making its first steps in the car segment looks meanwhile more than modest against foreign trademarks. The first output of Belorussian and Irani cars of “Samand” trademark meanwhile are sold not too fast. Since September 2006 till March only 70 cars were sold, moreover, for the most part to the corporate consumer. And that is herein when it is planned to assemble 5–6 thousand cars this year and by 2014 to lead annual output volume to 60 thousand cars.

But the producers don’t despond. The first steps were unsuccessful but the main reason is seen in the trade strategy which is not completely thought over. While Belorussian and Irani cars of “Samand” are sold in its singular version which is of luxe assembly. These cars may sound off 1,8 litre engine with a power of 100 hp., the package includes air conditioner, steering booster and ABS. That is why the cost of it exceeded 12 thousand dollars. And it turned out to be too high for a medium motorist. It is planned to make the car more democratic while refusing the range of technical extravagance. “Nowadays we redirected our advertizing campaign at the citizens with the medium-scale of profits. This segment looks perspective. We decided to change our strategy. The company is interested in an ordinary Belorussian having 3–4 thousand dollars, who doesn’t go to buy a previously used foreign-made car but deposited money in the capacity of initial fee for a new car”, — remarks Anatoliy Korotchenko, Director of official distributor of “Samand” trademark cars of “BelinstandartOil”.
Nowadays the cars are assembled from the vehicle sets, getting from Irani plant “Iran Khodro”. The home production of vehicle sets will be increasing. The joint project of Belorussian producer “Unison” and “Iran Hodro” company foresees two stages: the first is the tuning of assembly, the second is the construction and exploitation of a fab and painting shop. It is considered that at the end of 2008 and the beginning of 2009 a new plant line will work to the full extent of its power. Granting produced in Belarus bodies the percentage of home constitutive elements in the cars will increase to 51% that allows the plant to get a certificate and be presented at foreign markets. The main export directions of Belorussian “Samand” are the countries of Central and East Europe, Russia, Ukraine. In addition, after 2008 the price of so-called Belorussian “racers” (translation from Farsi of the car’s name) will fall to the democratic mark of 7–8 thousand dollars.

Fuel efficient ideology

By the way, the splice and painting lines will become the point of departure in the assembly of one more new Belorussian car. By the end of the year Belarus will develop the car production under a licence of Chinese company “Hafei Motor”. At the first stage it is planned to assemble cheap fuel efficient model “Brio”. Like in case with “Samand” all assemble works will be based on import constitutive elements. But after 2008 the plant is intended to get a certificate for Chinese fuel efficient cars. The Chinese side is ready to invest about 50–70 million dollars. The prices are planned to be high but in accordance with the producers there are plans to take the strategy of the people’s car market promotion. For some time “Brio” will be proposed at the price of 7, 2 thousand dollars, “Simbo” — 10, 2 thousand dollars, “Princip” — 12, 3 thousand dollars. Then there will be a price fall. Even nowadays Chinese models are able to compete because they have good price-quality relationship.

Evgeniy Vaganov , “Union-Motors” founder, proceeds from the fact that today the majority of world car producers redirected their productions at making new cheap models within 7–8 thousand dollars. “Moreover, Russian market may become a strategic one. Nowadays the demand for fuel efficient cars gradually increases, — assured Vaganov. — These tendencies will become noticeable in our country. New fuel efficient cars more often appear on the roads of Belarus”.

By the way, Belorussian hopefulness is not shared by its competitors. The head of “Atlant-M Farzeughandel”, the importer of “Volkswagen” cars, Sergey Mikhnevich , is assured that Belorussian cars will have to fight for the purses of the customers proving that domestic automotive industry is able to produce qualitative and safe cars. “Semi knock-down doesn’t have future if its main goal is domestic market, — the specialist explains, — and it can take no more than 50 thousand of new cars every year. On the basis of even now we may plan the system of sales. Moreover, enterprises must solve a big range of problems starting from the sales network, service, parts delivery and finishing by the domestic production of parts. So and in no other way Belorussian car can become a people’s car”.

In all appearance, all the disputes concerning the type of a people’s car for Belarus will be for a long period of time. Indeed, in due time “zaporozhets”, and “zhiguli”, and “moskvich” were the people’s car. But now foreign companies coming to Belarus are sure that the idea of a people’s car is old. A buyer, making his/her choice can always switch to other models even within one price bracket.

Alexander Sokolov
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