Movable Property

Specialists note, Belarus is the CIS leader in the number of cars per capita. In early 2005 Belarus has 170.5 cars per 1,000 residents, while the figures were as large as 160 and 130 in Russia and Ukraine respectively
The automobile world changes all around us like a kaleidoscope. VAZ 210… (add the last figure yourself) has been replaced by fashionable and not so much fashionable foreign cars. Homebred DIYs have been ousted (not all of them, of course) by professionals of service centres. Individual ferry drivers have been replaced by big market players. In short, the automobile market, which is a large-scale thing and has a respectable turnover in any developed country, has been “civilised” in recent years. If we take a closer look at the quality of the Belarusian car fleet, we will first see (proved by statistics) that “people’s automobile” Volkswagen has been the most popular car in Belarus in recent years. It seems one of those beacons, which signify our society has come closer to the common European standards. By the way, do you remember only ten years ago the Commonwealth of Independent States and Belarus in particular were tagged as the graveyard of European automobiles. According to head of Atlant-M holding company Sergei Ryabukhin, “the tag” is no longer relevant. “Times when our country was a scrap-heap and consumed the waste Europe got rid of have gone into the past. If today Belarusians buy used cars, those would be cars under ten years and in good condition”, the expert is convinced. In other words, the Belarusian automobile fleet has acquired quality. Quantity, too. Specialists note, Belarus is the CIS leader in the number of cars per capita. In early 2005 Belarus has 170.5 cars per 1,000 residents, while the figures were as large as 160 and 130 in Russia and Ukraine respectively. In other countries the figures are significantly lower.
Today many are interested in the future of the Belarusian automobile market. Experts said, last year Belarusians bought around 5,000 new cars. The dealership sales grew by 8%. By the way, in Russia and Ukraine the sales grew faster. Why? According to Sergei Ryabukhin, in the neighbouring states the market growth is extensive, the market is getting saturated. In Belarus the market is denser. The fight for clients is harsher… It would be logical for dealerships to redicrectl resources from slowly-growing markets to rapidly-growing ones. However, it was reported recently that several new car centres worth several millions of dollars are supposed to be built in Minsk. What reasons are behind this strategy of the suppliers? According to market analysts, in the next few years the demand for cars in Belarus is likely to surge. The dealers are getting ready for it. One of the factors that stimulates people to buy “steel stallions” will be (and is close to becoming “is”) creation of equal customs clearance conditions for juridical and natural persons, which import cars to Belarus.
The comparatively low customs due (which is well-known to depend on the car age and engine volume) also contributes to the sales on the Belarusian market. According to Sergei Ryabukhin, customs clearance in Belarus makes some 30% of the car cost, which is significantly lower than that in Russia and Ukraine. The car will cost 45–50% more after crossing the Belarusian border with the neighbouring states. High loan interest rates are one of the factors that slow the growth of car sales in Belarus. In 2005 the interest rates reached 12–15%. According to representatives of the dealerships, car loan interest rates as high as 9–11% would be optimal. However, the issue of the availability of loan resources remains open.
Another important thing worrying many participants of the car market — both existing and potential ones — is whether Belarus will have cars labelled with “Made in Belarus”. If Belarus will, how much the domestic demand for cars will be satisfied. Let us remind you, in January 2006 Belarusian Yunison joint venture and Iranian Iran Khodro signed a co-operation agreement. The agreement provides for assembling Samand cars near Minsk. According to Sergei Ryabukhin, the new cars have the potential to compete in the low end segment of the market with, for example, VAZ cars and Gorki Automobile Plant products. “It would be wonderful, if a large number of Belarusians could afford new and inexpensive cars. Our experience of working with Chinese producers shows that even KIA cars sold for $10,000–11,000 would be popular with Belarusians, who cannot afford new German cars and do not want to buy used cars. I presume, the Iranian cars would be cheaper than Russian and Chinese ones”, the expert said.
by Alexander Sokolov
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