UK-based international motor vehicle retailer and distributor Inchcape on Monday said it was expanding into the “high growth” through a joint venture with the Independence group of companies, a Moscow car dealership.
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The joint venture will establish two new Toyota sales and service centres in Moscow which are due to open in the second half of 2007 and expected to become Inchcape’s largest retail outlets in Europe. Inchcape has had a long association with the Japanese brand and at one time owned the UK distributor when it was an independent operation.
Toyota is one of the most successful foreign brands in Russia with sales of around 60,000 units in 2005, and a market share of foreign brand car sales of over 10.0%, Inchcape said in a statement.
It added that Russia is the largest car market in central and eastern Europe and is experiencing rapid growth in automotive sales. In recent years foreign brands have been increasing their share of overall sales in Russia, with a 61.0% increase in sales in 2005 to 567,000 units. The foreign brand share of sales is forecast to increase from 38%, of the total new car market in 2005, to over 50% with estimated sales of some 900,000 units by 2010.
The joint venture, which will be 51.0% owned by Inchcape and 49.0% owned by Independence, is the UK group’s first entry into the important growth market of Moscow, which has seen the highest growth in Russia over recent years. Moscow currently accounts for approximately 50% of foreign brand sales in the country.
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By GlobalDataIndependence is a multi-franchise automotive retail group based in Moscow. It was established in 1992 and has become one of the leading automotive retailers over the last 14 years with 12 showrooms and six service centres in Moscow. Brands include Jaguar, Land Rover, Volvo, Volkswagen, Audi, Ford and Mazda.
The joint venture will initially invest around US$35m in the new facilities. The sites will be based to the south east and south west of Moscow where growth opportunities have been identified for the Toyota brand.
Inchcape group chief executive André Lacroix said: “This joint venture with Independence is an important step for Inchcape in its expansion plan for Moscow and the Russian market place. It has been vital for us to find the right opportunity with the right partners, and with this joint venture we have created a strong platform from which to develop a larger presence in Russia over time.”
