This year’s car market crash will push for restructuring strategies among dealers, given dwindling turnovers, especially at the level of sales teams, believes Brent Valmar, vice-president of the Association of Car Producers and Importers (APIA).
"When the market is halved, restructuring is enforced. Positions in the manufacturing industry, distribution and sales structures will be particularly affected," says Valmar, who is also the general manager of Porsche Romania, the biggest player on the market, with turnover put at over 800m euros last year.
Any headcount cut of between 10 and 30% "is justifiable", according to the Porsche head, who specified nobody would decide on 50% personnel cuts.
"All car market players are facing a life and death moment; they either continue on the wrong way and fail, or go back to a normal level of 12-13,000 cars per month and that’s it. Any quality compromise goes against us," Valmar specified, alluding to retailers that offer big discounts, but also cut back on investments in quality.
According to Valmar, the second half will see prices of new cars go back to normal, as the discount campaigns aimed at getting rid of the stocks have ended.
Brent Valmar accounts for the steep fall in sales through the vehicle scrappage programme to just 400 units in the first three weeks of July by the fact that people who own cars older than ten years cannot afford buying a new car.
"Higher scrappage premiums would not be a boost as there have been even higher discounts. This year, it will be good if sales reach 30,000 units as part of the programme. We’ll have to wait and see the influence of leasing in the programme," said Brent Valmar, outlining that legal persons would not play a big part in the programme as they do not own old enough cars.
No car renewal programme has been announced for 2010, but, according to the APIA vice-president this is no longer a priority.
In H1, car sales plunged by 51%, to 70,610 units, according to APIA statistical data, but, according to Valmar the real decline revolved around 58%.
In H1, Porsche Romania sales dropped by almost 57%, to 12,325 units. "As the car market is to slump by over 50% this year, we have budgeted a decline of below 50% for sales of Porsche Romania, to around 30,000 units", said Valmar.
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