Retail Practices in the Russian Used Car Market

WHEN DEMAND OUTSTRIPS SUPPLY

A RUSSIAN PERSPECTIVE

I was delighted to be recently invited to visit a number of motor dealers in the Russian capital of Moscow. In my capacity as an automotive consultant who specialises in all aspects of used cars I was looking forward to comparing the Russian market to those I have recently experienced in the Baltics and the Balkan's where the economic miracle of 5 years ago has in some cases become a motor dealers nightmare.

Given my dispiriting used car experiences when visiting so many new and used car dealerships in continental Europe I didn't expect an awful lot from Russian motor dealers; great new car facilities maybe, but like many of their European counterparts I expected dealers to relegate used car facilities and their customers to the 'bargain basement' and boy was I right!

The used car 'display' in the photograph was outside a reasonably new and huge multi -franchise dealership on the outskirts of the city. I'm not sure this 'display' needs describing but just in case here it is! A collection of dirty, unprepared cars, with large gaps in the line up, no correlation to size or price grouping and certainly no thought for colour mixing either . The cars stood on rough gravel looking totally uncared for. In addition to this display they also had an internal used car showroom - actually it was more like a multi storey car park - which was accessed after quite a long walk past damaged vehicles waiting for repair in the bodyshop up some stairs painted in a very alluring battleship grey and into an area that had clearly been last in the queue when the electrician was fitting the lighting out.

To be fair I have experienced this attitude to retailing used cars in many parts of the world - even in mature markets such as Finland, Sweden, Spain, and Greece - but given the sheer scale of retail used vehicle profit potential in Russia I cannot understand why the motor dealers there who so clearly have the money to invest in great facilities do not grasp the opportunity before them.

Of course right now demand is virtually outstripping supply and dealers can take a trade in and with virtually no preparation easily sell it, without the need for any sort of consumer offer such as warranted mileage, service department check over, cosmetic preparation, warranty etc and they make a decent profit doing it too!

In short it appears that used car buyers expect little and get even less - poor faciliites, no consumer offer and generally damaged and dirty used cars.

The message of this blog is simple, get professional about retailing used cars in Moscow at least and you'll be on your way to your first million in the shortest time possible.

David Rathband

Director

European Used Car Consultancy Ltd - trading as motorvator