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A quarter of Russian automobile dealers on the verge of bankruptcy

Четверть российских автодилеров оказались на грани банкротства

A quarter of Russian automobile dealers, about thousands of companies that may be bankrupt this year. This statement was made Vice-President of Association “Russian automobile dealers” (ROAD), Vyacheslav Zhigalov, reports “Interfax”. According to him, this is due to churn from service centers.

“Three quarters of the income of dealers is revenue for the service, because sales is already practically do not bring profit. This year, dealerships may lose half of their download service,” said Vice-President of the ROAD.

The current situation is “second wave” of harm to the market caused by the continuing decline in sales of new machines, said the expert. According to the ROAD, the number of employee cars only in St. Petersburg for the year has decreased almost twice — so, and the level of congestion of dealer services in 2016 could fall by half.

“The bankruptcy of each of them (dealer — approx. “The tape.ru”) will result in the cancellation of millions of rubles of Bank loans because the dealer network is very leveraged,” he warned Zhigalov.

Speaking about the measures of state support of car industry, the expert noted that they are more focused on manufacturers, but does not take into account the interests of suppliers of raw materials and distribution networks. According to the Vice-President of the ROAD, to slow down the decline in car sales is possible with the help of the program of preferential crediting.

In December 2015, the Minister of industry and trade of Russia Denis Manturov said that the government has taken the decision to continue programs of support of demand in the automotive market. He clarified that the extension still will be limited to the first half of 2016, the funding will amount to 20 billion rubles. Programs of support include preferential leasing, preferential loans and supporting demand through the recycling program and trade-in.

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