Avtovaz intends to expand dealership network via long-term contracts
MOSCOW. March 18 (Interfax) - Avtovaz plans to increase the number of Lada dealerships via new three-year agreements with auto dealers, the company's Vice President for Sales and Marketing Artyom Fedosov said at a joint press conference with representatives of the Russian Federal Anti-Monopoly Service (FAS) in Moscow on Monday.
"We are counting on attracting more partners, which will lead to cheaper services," he said, addressing new long-term dealership agreements given the go-ahead by the FAS.
So far, Avtovaz has re-signed three-year agreements with 33 dealers. In total, the Russian automaker has 450 dealerships, 54 of which are its subsidiaries, Fedosov said.
During the press conference, Director of the Division for Oversight over Industry and the Defense Complex at the FAS Maxim Ovchinnikov said that Avtovaz supported FAS recommendations on working with dealers and agreed on the content of the dealership contracts with the regulator.
"Regulation of the minimal sales price of the Lada was eliminated. In the contracts agreed by the FAS, a maximum sales price is established in the interests of the customer," Ovchinnikov said.
Furthermore, territorial barriers for dealership operations were erased, and the conditions for contract-signing and justifications for Avtovaz to unilaterally dissolve a contract were determined, he said.
The transition to long-term contracts of over a year is positive for dealers in terms of forecasting return on investments, the FAS representative said. These conditions should drive down prices for services and boost their quality, he added.
According to Fedosov, long-term contracts will help dealers take out long-term bank loans.
Avtovaz started working on modernizing its dealership network in mid-2011. Sales on the Russian market fell 7% last year to almost 538,000 vehicles.
