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.