Yesterday the Ford plant officially opened in Vsevolozhsk. But for several days now the market has been discussing the announced prices for cars. At first, the prices looked so attractive that dealers of other brands were upset. But, after analyzing the situation, they came to the conclusion that Leningrad Fords would not fundamentally change the market, although Ford, of course, would increase its share. Recommended price for a Ford Focus model with an engine capacity of 1600 cc. cm in the minimum factory configuration (in particular, it includes an airbag and power steering) - $10,900. That is, the cheapest Ford will immediately be about two thousand dollars cheaper than the base models of its European and Asian C-class competitors. In addition, the “American” becomes in the same price range as Korean cars produced in Russia and three-year-old used foreign cars of a higher class.
The loan program announced by Ford aims to reach the typical audience of the VAZ ten. Thus, even before leaving the Russian assembly line, Focus clearly identified a very wide market segment that it intends to occupy. Ford executives also outlined these directions for conquering the market yesterday. However, long before this event, “panic sentiment” was fueled by Ford dealers, with pleasure and in detail “off the record” gossiping about who would be affected by the announced prices of the American auto corporation and what market share Focus would take away from its competitors.
In this situation, dealers of other brands had no choice but to say that his title brand would certainly withstand the competition, but everyone else would have trouble: sellers of European cars predicted a drop in sales of Asian cars, and those, in turn, of European ones. All dealers are united in one thing: the Ford Focus will not significantly improve its position on the Russian market by launching local production. And they tell you why.
Smart car enthusiast
Dealers have not yet made any complaints about the build quality of local Focus. Since there are no cars themselves. At best, they will appear in the fall of this year. However, it is precisely the prejudices about the Russian assembly that are one of the arguments against it. The consumer treats it with distrust. Everyone still remembers the scandals with the quality of Elabuga General Motors. And for example, Andrei Kashin, deputy director of the Rosspan salon, says directly: “I don’t believe that high-quality cars will begin to be assembled in Russia. In any case, the plant will have to hone its production technology for about a year.”
The traditional distrust of local auto products is illustrated by recent Focus sales statistics in Russia. It’s paradoxical, but true: on the eve of the entry into the market of locally assembled cars (a priori cheaper) in Russia, sales of more expensive non-Russian-assembled Focuses increased. Closer to the opening date of the plant, official dealers regularly reduced its price. For about another month in St. Petersburg there will be a situation where a foreign Focus can be purchased for about $700 more expensive than its Russian counterpart.
Price is different
It is worth keeping in mind that cars for $10,900 will most likely never appear on sale. Firstly, this is the price recommended to dealers - in reality, of course, it will be higher. In addition, dealers believe that the base model will not become the most popular model. “A car enthusiast has long learned to count and understands that it is cheaper to immediately buy not the minimum equipment, but a more sophisticated one,” says Sergei Petrosyan, director of the Carline salon. In his opinion, the most popular cars will be $12-14 thousand. And this will be much closer to the prices of competitors.
In addition, based on the experience of several Russian factories that assemble foreign cars, we can safely assume that in a maximum of a year, that is, when the plant reaches its declared capacity (8,000 cars in the first year), selling prices will increase.
Another disadvantage of Focus is that the model was developed in 1998 and is quite outdated. That is why dealers of other brands are calm about comparisons with the newer, and therefore more expensive, models they sell. And finally, until now, Ford sales in Russia have been low. Despite the fact that sales this year, compared to the first half of 2001, increased by 93% (2818 versus 1459), Ford is inferior to Skoda, the sole leader in the market, to German, Asian and French cars. The director of the Bangor salon, Vladimir Baushev, illustrates the so far restrained attitude of the Russian consumer towards the American model: “Did you see what massive advertising Focus had? And how many Focus do we see on the streets?” And, according to the traffic police, we see 4-5% of the number of new foreign cars sold.
Why did we kill the Frenchman?
Among European cars, Skoda Fabia and Oktavia fall primarily into the price and competitive niche of Focus - of the 500-600 new foreign cars sold in St. Petersburg, about a hundred are from these brands. Skoda dealer Andrey Kashin believes that sales of his model could fall by up to 20%. But at the same time, he does not intend to reduce prices, since Skoda, in his opinion, has one significant advantage - non-Russian assembly.
Such “French” companies as Peugeot, Renault, Citroen will also fall under the onslaught of Ford. The Peugeot 307, for example, costs $13,000 in its basic configuration. However, dealers of these cars consider the comparison with the Focus not entirely correct. “Firstly, Ford does not have a very good reputation in the Russian market,” says Anton Cherlov, dealer and director of the Avtoevroservice company (Peugeot dealer), “and besides, how can you compare the new 307 model with the ‘old’ Focus?” .
Another sales leader, VolksWagen, does not consider itself a competitor to Ford. The cost of its best-selling Passat model in Russia (accounting for up to 50% of its sales) starts from $20 thousand. “And sales of Polo, which falls into the same price niche as Focus, are too insignificant to talk about competition,” says the director.” Sigma Motors" Dmitry Khrebtov.
Asian weeks
Dealers of Asian cars, in addition to traditional price comparisons of not base models, but already equipped ones, also present arguments in defense of their brands that, at first glance, may not seem very convincing. The fact is that the concepts of organizing the interior of Japanese and Korean cars differ from European ones.
And a fairly large group of car enthusiasts fundamentally drive only Asian cars, without much regard for their price. On the other hand, Korean cars - Hyindai, Daewoo and Kia - have more room to play with prices if their sales start to fall.
Games on the carpet
The positions of the VAZ tens, which cost about $6,000 (in St. Petersburg, up to 50% of VAZ sales account for this model), are quite vulnerable after the entry into the Focus market. In fact, the lending program that Ford presented a few days before the opening of the plant is aimed specifically at potential consumers of the Togliatti automaker’s products.
The essence of the Ford program is as follows: prepayment from 30 to 50% of the cost of the car. Loan amount up to $30 thousand. The loan period is up to 2.5 years, the interest rate on the loan is 10%. That is, by paying about $6,000 and paying a little more than $240 monthly, you can get a new car with a foreign name. The fact that the target audiences will begin to overlap is also acknowledged by the director of the Piter-Lada company, Vladislav Rydaev. But he relies on his own lending system, as well as on the fact that Russian cars are more adapted to the local climate.
The Russian government can play on the side of the “ten,” as has happened many times before. Many dealers are confident that if VAZ sales begin to fall, “undercover games will begin against Ford.” Another target audience that Ford is targeting is used three-year-old foreign cars. However, in the Ford price niche - $11-18 thousand - we sell three-year-old cars of a higher class. And the American corporation will first have to convince car enthusiasts to get into a new car, but a less prestigious one.
ROMAN OVCHINNIKOV

Newspaper "Kommersant St. Petersburg" No. 118 dated July 10, 2002, p. 4

Ford drives in from different directions