AutoSpecCenter leads in profitability on a falling market, and encourages others to be in trend

Vladimir Mozhenkov, member of boards at AvtoSpecCenter

According to the estimates of Forbes magazine, one of the largest car dealer holdings of Russia, group «AutoSpecCenter” lost in revenue 2.5% in 2016. Thus, according to the Association of European businesses, sales of new cars and LCVs in the Russian car market decreased by 15% in January-August 2016 comparing to the same period in 2015. The other ТОР200-automotive companies are less successful – their profits have fallen by 8.9%-32.1% (“Major Auto” -8.9%, “Rolf” -13%, “Avilon” -14.5%, “Genser” -28.7%, “Avtomir” -32.1%).

“For any car dealership the main thing is to be in trend and to anticipate consumer preferences in time. For us the highest priority tasks are to maintain loyal customers and to increase quantity of new customers”, – commented the situation Alexander Zinoviev, Director of brands at group “AutoSpecCenter”.

Cultural-political magazine “E Vesti” has appealed to the member of the Board of Directors of “AutoSpecCenter” Vladimir Mozhenkov with the request to share the experience of overcoming the crisis. Our talk turned out to the Russian economy in General, the automotive market in particular, its trends and “shimmering” goals. Kindly read the interview below.

E Vesti: Vladimir, according to Forbes, the profit of “AutoSpecCenter” Group fell by 2.5%, regarding to the market, it is an excellent result. We would like to know your opinion, how did you manage it?

Vladimir Mozhenkov: First of all, it would be more correct if you addressed on this issue to the chief Executive officer of the company Alexander Halilov. But if you look at the statistics of 2015 for the first ten or first twenty companies, “AutoSpecCenter” – was the only company which increased revenue and rose from sixth to third place by this indicator in Russia. This became the most significant leap in 2015.

Second, the “Chicks are hatched”, indicators need to be watched for the whole year. This is a very important quarter; I think everything will be at the level, because “AutoSpecCenter” successfully renewed the team and adjusted strategy.

E Vesti: As for the current situation, is the market growing in September?

Vladimir Mozhenkov: First of all, the market is still very difficult. Second, there are different brands that behave themselves in different ways. Some of them are strengthening, some stay on their own, some are falling.

In addition, now the increasing role passed to the effects of scale and experience. The era of efficiency came, when every system on the enterprise or group of companies should be effective-effective-effective (that is, to work with revenues and to optimize the expenditure part).

E Vesti: If you leave the market and spare your opinion as a leader and a business consultant, where would you recommend drawing the attention of the head of the company? What is today the key to effective strategy in Russia?

Vladimir Mozhenkov: If you take the economy as a whole, we see that, unfortunately, the state, the government has no coherent strategy. I think that now it is necessary to develop a strategy at least for 10 years. Then we understand where we’re going, what kind of economy we build. Based on this, industries and enterprises will determine their policy.

Today there are niche industries, which have development strategy. For example, agriculture has a positive trend, and it will grow and grow. The military-industrial complex has adequate funding and is also increasing. You need to determine the priorities of a country, through the prism of these priorities laws and requirements, decisions will be made.

If we build a smart economy, we mean the development of such industries as: education, fundamental and applied science, innovation centers, etc.

If we build an economy based on the use and processing of our resources, our natural wealth, that is another strategy, you will need to do another plan.

If we go to an innovation-based economy, it is the third way, there are other factors playing a dominant role.

I feel closer to innovation because you called me and caught me at the Paris motor show. On the stands of the Mercedes-Benz, Audi, BMW, Porsche, etc we see electric vehicles.

Electrification of the global automotive industry started. We cannot go anywhere not keeping it in mind. So, our oil, even if it is kept in demand in 5-15 years, I think, it may not be more expensive the current $ 40-50. Because more innovation, innovation and innovation. Therefore, I am for the innovation economy.

You know, 3-4 years ago for us hybrid cars were a novelty. Hybrids are still there, but there are already electric vehicles, which pass 300-400 km. We saw here the car of Opel, which is running 500 kilometers on a single charge. Next year this car will appear on the market.

Volkswagen presented its strategy by 2025, provided for annual production of 1 million cars on electricity.

E Vesti: We were at the Moscow motor show and we were talking with NAMI institute. They told us that together with KAMAZ the company develops a road transport system of the future, which in principle excludes private ownership of cars. In this budget very serious money were allocated.

Vladimir Mozhenkov: Yes, absolutely, as you rightly said.

One trend I call “electrification”, that is an electric socket in every house, in every garage, on every Parking lot.

Along with this another trend is sharp reduction in the consumption of cars by residents of large cities.

The third trend is a car without a driver. At one of the stands there is the car where the wheel seems to be kept, but the steering column is absent. Volkswagen showed a concept where the wheel slides are out and the vehicle can go without a rudder. On the other stand we saw a vehicle without a driver. You know that this summer in Singapore was launched a taxi without a driver, in the Netherlands are now developing motor boats on the channels without a captain. So innovation, innovation and innovation.

And here we face another huge problem. As far as I know, there are two jobs in the world, which employ the most people. I mean those of a seller and a driver. And the profession of driver will not be needed, where people can get a job?

Those calls will grow now. Somewhere I read that the rate of changes in recent years has increased by 50 times. Changing the mentality of the consumer, the customer. Generally, the modern customer, especially a young man 20-30 years, he needs iPhone or iPad only, the vehicle he needs no longer. If 10 years ago, young people dreamed about the car, now they dream of a good iPhone or iPad. They’re all getting out and using the latest apps, Internet and so on. Today he ordered, then he brought home a book, clothes, shoes, and tomorrow he will be ordered to deliver the car.

And tomorrow it will order Uber to come to him quickly, and then he will come out, go 100-200 meters to a car, which will drive to his destination, then close automobile and go to office, work or home.

E Vesti: Yes, personally-public kind of transport.

Vladimir Mozhenkov: This is why we now live in such interesting time when the rate of change is actually huge and it will accelerate.

Therefore, it is very important to have a strategy and to see “shimmering goals” that will appear. I now ask many friends: “How do you think, when your assistant is going to be a robot with artificial intelligence?» – “Hey, what are you telling?” “I say, after how many years?» I never thought of it!”, “How could you never thought?! It will take 2-4 years and you won’t need live help, you will have an assistant in the form of artificial intelligence that will call to remind you to take it to give you data to analyze your options and work with you.” We should think about it because we live in a most interesting time.

But the strategy is needed. And when you go to this strategy, you need to look at «shimmering goals.”