BELARUS NEWS AND ANALYSIS

DATE:

Tuesday, July 26, 2005

Atlant M to Build Car Village

Alexander Filatov

Special to Vedomosti

International automobile holding Atlant M plans to build a car village near St. Petersburg that will accommodate several car dealerships, selling different brands in the same place. The project cost has been set at $60 million to $70 million, with a similar village earmarked also for the Moscow region.

Atlant M is a Belarus-registered holding, specializing in the sale, guarantees and servicing of vehicles, as well as car component trading. In Russia, the holding runs official dealerships for Audi, Toyota, Volkswagen, Mazda, General Motors, Ford and others. In 2003, Atlant M sold 12,000 vehicles, with a total turnover of $260 million.

Plans for a car village near the city focus on a 15 hectare area by the ring road, which lies in the Leningrad Oblast, said Yelizaveta Kaprolova, brand manager for Atlant M in the Northwest.

The building works for the $70 million project will begin in the first half of 2008. Several city car dealerships are currently looking at the location and deciding on its suitability, said Alexander Butenin, press secretary for the committee for economics and investment in the Leningrad Oblast said.

A car village project, a concept that originated in the U.S. in the late '50s, has also been launched in Moscow. Atlant M bought an 11 hectare area by the Moscow Ring Road (MKAD) in 2003, and in April this year the first dealership, Toyota Center Izmailovo, opened there.

The Moscow car village will have seven car dealers, and investments in the project make up $100 million, said Sergei Sklyarov, the brand manager for Atlant M in Moscow.

The holding's rivals are preparing some alternative projects. Rolf group will develop several car village centers near Moscow, said Valery Tarakanov, marketing manager for the group. In Europe and the U.S. large auto-cities sprawl along the main highways.

"A client that passes by such villages can choose a car during the course of a day, seeing all the options. Meanwhile, dealers also win by saving on repair centers, parking, and warehouses that can be used by all," Tarakanov said.

"We are saving money on the land prices, since it is cheaper in the region than in the city," Sklyarov said.

Meanwhile, Roman Slutsky, head of Alarm Motors in St. Petersburg, a Ford dealership, calls such car village plans as a "mania for largeness." Slutsky says it will be hard for dealers to maintain standards in a rural location.

Ford's spokeswoman Yekaterina Kulinenko says that the company prefers for its vehicles to be sold separately, away from other auto brands.

"However, considering the trends on the market, we are not against Fords being sold alongside other brands that belong to Ford Motors Co., for example Volvo and Mazda," she said. Any other "neighbors" would need individual assessment, Kulinenko said.

Source:

http://www.times.spb.ru/index.php?action_id=2&story_id=276