Car prices in Europe: evolution and differences between member states: Slovakia prices in free fall, for best deals shop in Hungary

The European Commission has released its car price survey for last year.

The report focuses on pricing differences between EU member countries by comparing price lists of cars in member states, and adapting major equipment differences.

This study has been issued on a regular basis since 1993 and has strongly influenced manufacturers to narrow the price differences of cars between EU member states or face (unwritten) a totally liberalized market.

Major differences occur often in pre-tax prices, since in countries where cars are heavily taxed, competition between manufacturers often drag fully taxed prices down. With the Euro, gaps have been considerably reduced as currency variation could not explain differences any more, and that price variations between countries became more visible to consumers.

Slovenia shines as one of the cheapest markets of the Eurozone after Greece. In the small car, it is the least expensive Eurozone country for 7 models out of 30. When it is more expensive, difference rarely reaches 5% difference with the nearest country.

As for another Euro country, Slovakia, the most important information is that according to the report, prices of new vehicles have dropped more than 17% when average prices in Europe dropped only 2.5%. It is no surprise that the used car market suffered as it did. I recalled on my website some used car professionals talking about sales prices going down one third.

We know that the Czech and Polish markets are highly competitive. The report shows it as the Czech Republic is cheaper than any Euro country for 7 models out of 20 from the small car segment and for 6 models out of 20 for the lower compact segment (Škoda Octavia…). It is to be said that this result is achieved even though the Czech Crown has appreciated against the Euro 3% between January 2010 and January 2011.

But the palm of attractive car prices is Hungary: in the small car segments, it shines as the cheapest country in almost half of the most selling models. In the lower intermediate segment, Hungary is the cheapest market for 5 out of 20 models.

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Used cars with no kilometers shown?

I visited on the road a large used car retailer to take a look at its operations in a surviving sales site (one sales site in Slovakia was closed last year).

Some cars are shown without the number of kilometers. It simply says “unknown”

It looks bad, but this is a major improvement.

Let’s face it; our countries in general were a fantastic oasis for remarketing high mileage cars from Western Europe. What Germans and French did not want, the Poles and Slovaks took. Well, let’s say that some importers took at low prices cars that were magically improved and sold at higher prices…much higher prices. After all, these cars had less than 100000 kilometers…

So I applaud transparency in this business.

Transparency will clean up the offer of used cars, and correct prices. It will help the establishment of an intermediate used car market and help develop inter dealer B to B trading by creating stronger market price differentiations between products.

Perhaps, the money invested by manufacturers in used car programs (Peugeot, Citroen, Kia and Škoda among them) will pay out.

Best operators, and best advised operators might take the train of this opening of business. If they do not, AAA Auto will take the food right out of their mouths regardless of the quality of their certified used car programs.

For leasing companies and manufacturers, the oasis of markets that buy everything  is drying up. I foresee strong corrections in price depreciations in the near future.

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Enjoying the final minutes of your present game level

I remember playing on my PC “age of Empires”. In that game, you had to make the right decisions while building your civilization and allocating the right resources to agriculture, military and technical progress. Much of your “people” functioned automatically and you just supervise what they are doing. At one point, you achieved a situation in which your choices pay off and your civilization is thriving and expanding at such a rate that the other civilizations cannot destroy you militarily anymore and you know you are going to make it to the next level.

No-one should indulge in self admiration, but you are entitled to enjoy those final moments where you cannot lose until you go to the next level, which will evidently be a little more challenging.

As I sit in my hotel room in Budapest, and the guys from the distribution network I am putting together for a client have left the conference hall, I can feel the end of “level 1” for this project. I think that from a “rag tag” band, we have in the last days created the backbone of a very professional sales network. I know what lies ahead, but I am sipping some satisfaction and am travelling back in time to my “age of Empires” era.

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Krakowski Kredens: a Polish example of quality and merchandising

As I visited some business partners in Poland, my girlfriend asked me to bring her back some tea from the Polish chain store “Krakowski Kredens” . They have several shops selling delicacies prepared in the traditional Polish way,or rather as they say the traditional “Galician” (south-east of Poland) way.

After its initial creation in 1906, the brand was recreated in 2007 and was up to my knowledge not existent during communism. Its success in just a couple of years rests on a clear view of what customers want. Something that lacks in a lot of mindsets of some local Central European entrepreneurs more focused on a “fast money” rather than on “durable profit”.

The products are high quality. But high quality is’nt enough when not marketed properly. That’s what I admire the most from these guys: their capability of attracting first hand customers with their carefully designed shops and boxes, and keeping them with the quality of their products, the increased range of distributed products, and their private shops conveniently located in shopping malls as well as busy and prestigious streets in Poland’s main cities.

And the final touch of this resides of course with the people who do more than just smile, but are actively capable of recommending products to you, and showing you suggestions. No doubt there is high quality sales management behind all this not only at the corporate level, but at the shop level as well.


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Anonymous goodbye _ (English)

There is an automotive professional leaving Slovakia this week.

Although it would be wrong to give out his name or any info, I really feel I should thank him. At the height of the financial crisis as I was fighting to keep afloat, he provided me with a big consulting program in the field of used cars.

In the end, the head office of the manufacturer he was working for wanted only to work with a huge prestigious firm with a good (and for the most part deserved) brandname. But he told that for Slovakia, he wanted my firm aboard as well. He took the risk of upsetting the head office guys who had selected the  “usual suspects” when it comes to automotive consulting.

If you read this C., thanks and stastnu cestu!

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Les exportateurs français ont besoin de commerciaux _ (French)

C’est avec curiosité, mais aussi avec une certaine tristesse que j’ai lu l’article dans les Echos du 8 juin relatant un nouveau triste record pour la France: celui de son deficit commercial d’Avril dernier.

Structurellement, on sait que les matières premieres contribuent egalement aux difficultés de la France. Certes, certains évènements conjoncturels ont également influencé ce chiffre et les questions de compétitivité des entreprises ne peuvent non plus être balayées du revers de la main, mais il faut se rendre à l’évidence, les Français ont de sérieux problèmes dans leur approche à l’exportation, et malgré quelques succès, beaucoup d’entreprises, et surtout les PME, peinent à trouver un rythme durable.

Et pourtant, chaque jour nous avons à nouveau des déclarations politiques et des grandes annonces de reorganisation de la filière export.

Pour ma part il faut au contraire revenir aux réalités et aux fondamentaux des affaires.

Tout d’abord, quitter le cocon de la mentalité française. La pire erreur d’une PME serait de s’enfermer dans une vision franco-française et de passer à côté du monde tel qu’ il est. Pour ma part, je travaille en Slovaquie avec des Slovaques, des Tchéques, des Français, des Américains, des Allemands, des Italiens, et des Hongrois. Tout est interconnecté à l’export: Les clients sont de toutes nationalités. C’est le grand point fort des Chambres de Commerce Françaises à l’étranger (CCIFE) par rapport à leurs concurrents: elles sont fortement integrées dans le tissu local en comptant dans leur réseau des entreprises nationales, mais aussi d’autres entreprises internationales potentiellement clientes. Ce sont d’excellents points d’entrée pour les PME.

Ensuite, et probablement le plus important: rien ne remplace une réelle approche commerciale en intégrant action et management. Et même si on s’appuie sur un distributeur car ce dernier vend les produits sur lesquels il a le plus d’information et d’animation.

Ce qu’il manque le plus pour permettre aux entreprises d’exporter: des commerciaux qui prennent le relais des CCIFE. Des vraies prestations commerciales, proches des clients et suivies. Pour ma part, faut travailler à la source pour fédérer les besoins des PME, et les aider à s’unir pour trouver des solutions durables d’animation commerciale dans les pays cibles.

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