Russian dealers have started to reduce costs

Sales decrease makes dealers to save. The majority freeze building of new outlets, many reduce the advertising budgets, some save on the staff.
The newspaper �Vedomosti� informs that sales of new foreign cars in Russia hasn�t grown since June, according to ��� in June 202,309 cars were sold and there were no surge after the traditional summer decrease - in October 169,115 cars were sold. The majority of regional dealers are waiting for hard times. So, the distribution company "Rolf" plans to finish building of several large dealer outlets in first half of 2009 and is not going to start building of new ones in the next one and a half year. Top-managers and representatives of "Avtomir", Incom-Auto, "Atlant-M", "Avtospetstsentr" and others also announce about freezing of new projects. One of them says that investment programs completely depend on creditor banks.
Except development dealers save on marketing as well. According to TNS, in September automobile advertising constituted 4.7 percent of all advertising market. Dealers cut down the advertising budgets proportionally to reduction of sales volumes or cease the corporate advertising campaign concentrating on sale stimulation and support of dealer outlets.
Some dealers are ready to start saving on the personnel - at the expense of reduction of staff or wages and also by means of redistribution of employees inside the company. In their turn auto manufacturers are ready to support their dealers. They prolong payment in installment, reduce penalties for non-placement of advertising in proper volume and reduce requirements for development of a dealer network, the financial structures increase financing of cars� deliveries for dealers.