Blog: Boomtime, the revered Benz and a bit of tyre heaven
Dave Leggett | 8 October 2007
I interviewed Rolf Group’s Matt Donnelly earlier today – we did it down the telephone. It’s getting colder this week in Moscow and the first snow of the winter is anticipated. That means changing to winter tyres, but there’ll be a transitional period when people are sliding around all over the place, he says. ‘They forget that it snows,’ he said.
And tyres are a very big aftermarket item – each new car Rolf supplies comes with an average US$2,500 worth of options and accessories (on an average US$23,000 price). Every car is sold with ten tyres and 70% are sold with ten wheels.
Some other Donnelly nuggets:
- Why would a Russian be in a Lexus RX300 hybrid? Probably not because they have gone all green and eco-minded, but because the order time – likely a grey market shipment from US - is so short and waiting times in Russia are an issue.
- At the luxury end of the market, many aspire to a Mercedes and just above that a Bentley (they are both sold by Rolf; to be fair he did criticise BMW but was decent enough to point out that BMW is not sold by Rolf). Rolf is selling a Mitsubishi Pajero-based Changfeng model. A big advantage with such a vehicle is parts commonality with the Pajero (there’s a huge unofficial/DIY parts and repair mentality/business in Russia).
- Life in Russia: The good? Russians are nice people; it’s a dynamic environment to be in sales, the income tax rate is just 13%. The bad? Bureaucracy, food and the weather.
- Corruption/organised crime? Keep the business clean, keep saying no and they eventually move to softer targets. If you show weakness, the game's up and you're stuck with the consequences. Rolf is staffed up by a small army of lawyers and accountants 'who contest everything' to protect its interests.
One final point I'll make. It's apparently going gangbusters in Russia and vehicle makers can't get enough product out quickly enough. There are longish waiting lists and queues of monied up people who are impatient to get spending and enjoying a consumerist extravaganza. But, yes, queues for cars. Given what Russia used to be like under Brezhnev when people queued for bread (well, that's what it said in the Daily Mail), that's perhaps just a bit ironic.
The full interview with Matt Donnelly will be published on just-auto soon.
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