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Soaring Demand Helps Ford Dealers Find Focus

In response to soaring demand for mid-price Fords, a number of local car dealers have announced plans to open new facilities. One of the city’s largest dealers, Alarm-Motors, is to begin construction of a new service center in the Krasnoselsky district, in which it will invest about $6 million, the company said Wednesday in a statement.

The new center will be located at the junction of Petergofskoye Shosse and Marshala Zhukova Prospekt. With a total area of around 5,200 square meters it will be the largest Ford service center in the city. “This project shows our loyalty to the Ford brand. Our company is striving to ensure its leading position in the local market through the selling and servicing of Ford cars,” Roman Slutsky, general director of Alarm-Motors, said in a statement.

“With the arrival of international carmakers to the city we are facing tough competition and consider it a priority to develop the market through provision of the best cars and service,” Slutsky said.

Alarm-Motors expects the new center to sell 5,000 cars a year and service 100 cars a day. The company already operates two Ford centers in the north of the city — in Lakhta and Ozerki. According to company data, it holds 41 percent of St. Petersburg market.

“The new dealer center…will provide residents in the southwest of the city and suburbs with the opportunity to buy and service their cars directly near their homes,” the statement said.

In the first half of the year Alarm-Motors sold 1,822 Ford cars. Compared to the same period last year sales increased more than two fold.

A number of corporate customers have been instrumental in this result — Baltika brewery bought 308 cars, Pepsi Bottling Group bought 60 cars, the Federal Service for Control over Drag Turnover bought 40 cars, the General Department of Interior Affairs in St. Petersburg and the Leningrad Oblast bought 39 cars.

By the end of the year Alarm-Motors expects to sell 3,500 Ford cars in total.

Rolf-Carline, another of the city’s Ford dealers, will open a new service center by December this year.

“Not only Ford but all producers and dealers of mid-price cars have been caught out by a such a rapid expansion in the market. As a result, we have queues for cars and for servicing,” said Sergei Petrosyan, director of Rolf-Carline.

In the first half of 2006, Rolf-Carline sold 1,377 Ford cars. However, this figure is not truly indicative of the situation, Petrosyan said, because strikes caused Ford to stop production for some period and orders were postponed.

Taking into account this year’s orders, Petrosyan said that a doubling of Ford sales was very likely.

“All market players are currently investing into the expansion of their services. The demand for cars will surely be saturated. Unfortunately, however, car production is a complicated and expensive business. You can’t suddenly increase production or open a new service center,” Petrosyan said.

The dealer’s activities are in accordance with Ford’s plans for expansion. Earlier this month Ford revealed its plans to increase production volume and sales in Russia.

“We are working on increasing our production facilities. Ford in Russia and Europe is very concerned with this question. We see high demand for our cars, and we don’t want to allow our competitors to have more production facilities here than Ford,” Interfax cited Henric Nenzen, Ford Motor Company president in Russia and CIS, as saying last week.

By the end of the year Nenzen will announce either the construction of new production facilities or the increasing in capacity of an existing plant or the launch of a new model.

This year Ford expects to sell 120,000 cars in Russia compared to 60,000 cars last year.

In the first half of 2006 Ford sold 36,826 cars in Russia — a 87 percent increase on the same period last year.

At the moment the Ford plant in Vsevolozhsk, Leningrad Oblast, is capable of producing 62,000 cars a year.

“But this amount is still not enough. We still have queues of customers waiting for cars. Our constant headache is how to expand production facilities in Vsevolozhsk next year and the year after,” Nenzen said.


Soaring Demand Helps Ford Dealers Find Focus
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