Toyota Corp. to Open Dealerships in Far East Russia by Next Summer

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Dec. 23 – Toyota Motor Corp. plans to open new authorized dealer’s centers in the Far East Russian cities of Khabarovsk, Vladivostok and Nakhodka by summer of 2012, President of Toyota Motors Russia Takeshi Isogaya said in a statement released to the press.

Dealer’s centers would be established in concentrated areas within the cities already receiving Japanese investment.

According to the Fumitaka Kavasima, operating sales manager of the Toyota Motors Russia Dealer Network, three centers will receive the status of “authorized dealer” next year. The centers will sell new cars at the same prices as other dealers of Toyotas in Russia.

Until now these centers were engaged only in the servicing but not the selling of Toyota vehicles.

Company estimates the three new dealer centers will sell about 100 new vehicles per month combined, which is higher than the average sales of other Toyota dealers in Russia. The Moscow and St. Petersburg dealers, for example, sell 70 to 80 cars combined per month on average.

On a mid-term horizon estimates put the three new dealers at 5 percent of total Toyota Motors Russia consolidated sales. Toyota plans to sell about 150,000 cars in Russia in 2012.

“High sales in the coming year in the Russian Far East are not what we are reckoning on, but in a long-term outlook we are keeping in view serious development of the business. In many respects our business growth rates depend on local authorities and import regulations,” Kavasima said to the Russian business daily Vedomosti.

According to the Japanese news agency Kyodo, approximately 560,000 Japanese-made vehicles found their way into Russia in 2008, more than half of them used. However, since the introduction of higher import duties on used imported cars on January 11, 2009, the number of imported cars dropped dramatically to a mere 50,000 by the end of 2009.

The new customs taxes have risen by 20 percent to 80 percent depending on the age and type of the car. Vehicles less than five years old, for example, have seen a tax increase from 25 percent to 30 percent. The aim of the raised duties was to increase the sales of domestic cars.

Apart from increasing sales, there is the hope that new Toyota dealerships will support local entrepreneurs, many of which lost their businesses after the introduction of higher import taxes. The new dealerships combined with higher import taxes may have the added effect of sending used Japanese cars previously bound for the Russian market to China and Mongolia via Russian rail.

The decision to establish new dealers’ centers came a month after the news establishing a new joint venture between Toyota Motor Corp. combined Mitsui & Co. and Moscow-based Sollers automaker. The venture will bring production of some Japanese car brand parts to Vladivostok.

The plant would be Russia’s second assembly site for Toyota, which was first among all Japanese car manufactories to the Far East region. The first factory is located in the industrial area of Shushary, Leningrad region.

Toyota will supply its new plant with parts needed to build the Land Cruiser Prado SUV and the joint venture will assemble 50,000 cars per year expandable to 200,000, which will be sold through the Toyota dealer network in Russia including three new centers in Far East.

Joint venture called OOO Sollers-Bussan plans to begin production in the spring of 2012.

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