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State Tenders Lost Attractiveness for Major Auto Importers

Large auto importers are talking about a decline of  business in terms of the  state tenders. According to the CEOs of   the country’s two largest auto importers Tegeta Motors and Toyota Center Caucasus, the government reduced the costs of the  tenders on purchase of services for maintenance of vehicles,however, small companies participate and win tenders that  has been reflected in the business of major players.

Irakli  Gurchiani, Director-General of Toyota Center Caucasus,  says that  the standards were introduced for the state tenders which are suitable   for cars of  low quality such as Hyundai, KIA and not a serious brand such  as Toyota.

“If you buy a Chinese car,   in a year its repair will cost 10 thousand dollars, while Toyota’s car will not need repair for 5 year,” – says Gurchiani.

 The company has not yet summed up the  results for the year, and therefore, the growth rate is unknown, but in Gurchiani’s opinion,  this year a growth was observed.

Change in  the terms of the tenders was one of the reasons why the growth rates have reduced for Tegeta Motors business.

Government orders were among  the company’s four directions where a decline was recorded.

According to George Mshvildadze, the company’s  Commercial Director, if in previous years the growth totaled 10-15% , in  2014 this figure was only 7%.

Mshvildadze explains this by   several reasons, including the allocation of the same funds  for infrastructure projects by the state.

As for next year, he expects growth in terms of retail sales, but wants that more infrastructure projects to be carried out.

“We focus on  four areas – retail, corporate direction  for private companies and  the  state and wholesale channels.

We had growth in  three directions,  a decline was recorded only in terms of the government orders , “- says George Mshvildadze.

In his words, the reduction of orders from the government led to the economy  for maintenance  services. The cases, when a relatively small companies offering lower prices for the government win tenders, have become more frequent.