Rolf aims to sell 40,000-45,000 new cars, 70,000-80,000 used ones in 2025

MOSCOW. Dec 27 (Interfax) - Rolf Group, Russia's largest car dealer by revenue, plans to increase sales of new and used automobiles by 18-32% to 40,000-45,000 and 9-20% to 70,000-80,000 vehicles, respectively, in 2025, the group's first deputy CEO, Svetlana Vinogradova told Interfax.

In 2024, Rolf is expected to increase sales of new cars by 17.2%, while its sales of used cars are expected to plunge 37.3%.

"This year we'll sell 34,000 new automobiles compared to 29,000 last year, and 64,000 used automobiles compared to 102,000, respectively. There are economic reasons for this. After the increase of the [Central Bank's key interest] rate, we realized that buying out vehicles with a large difference to the market is virtually impossible. The business of new automobiles is partly financed by distributors, after all. But the business of used automobiles is financed by the company, so it makes economic sense to sell a little less," Vinogradova said.

Rolf also expects its IFRS financial results to fall this year. Net profit is expected to drop 40% to about 3.1 billion rubles on revenue down 12% to 285 billion rubles, and earnings before interest, tax, depreciation and amortization (EBITDA) are expected to fall 29% to about 10 billion rubles.

Commenting on Rolf's financial and operating results, Vinogradova said the focus in the automobile businesses has shifted from traditional transactions with vehicles to servicing and provision of other services.

"Of our 10 billion ruble EBITDA, more than 60% is income from services. When I worked as a director of a dealership 20 years ago, 60-65% of our revenue came from new automobiles and 35% from services. Now 62% is services and the remaining 38% is split between new automobiles and used vehicles. The business has changed a lot, and for many companies selling automobiles has been lossmaking for the last few years. This is why we've begun talking about developing an ecosystem, which will include everything related to automobile ownership: servicing, towing, rental and taxi services, and purchases of spare parts," Vinogradova said.

Rolf intends to revise its plans for sales of new cars in 2025 depending on the market situation.

"It's clear that this year the market will be at a level of 1.6 million automobiles. Figures for next year vary widely, from a completely pessimistic scenario of 1.2 million to 1.4 million units. But, nonetheless, with the franchises that we have and with automobiles shipped in through parallel imports, we believe that our sales will be about 40,000-45,000 new vehicles," Vinogradova said.

The dynamic of used car sales next year will depend heavily on the key interest rate, she said.

"This whole business is financed with our own funds, and when the rate increases, we calculate every time what amount of automobiles it makes sense to buy out and sell. The used automobile business is the sum of trade-ins, where we buy automobiles from customers who buy new vehicles, and the purchase of vehicles 'off the street,' so to speak. With the trade-in business, everything is clear, but for 'off the street' we'll be looking at cost effectiveness. But we certainly anticipate that the figure will be higher than this year, somewhere in the range of 70,000-80,000," Vinogradova said.