Inchcape, the UK's biggest quoted car retailer, made its first foray into Eastern Europe yesterday by unveiling plans to open two giant Toyota dealerships in Moscow.
The outlets, each of which is expected to sell about 3,000 cars a year - 10 times the throughput of the average European dealership - are likely to be followed by other dealerships elsewhere in Russia.
Andre Lacroix, who took over as Inchcape's chief executive in January, said the company was looking to expand into three new countries in addition to Russia and confirmed China was on the list of possible new markets.
The company, which has dealerships in six countries including the UK and sells £4.5bn worth of cars a year, is entering Russia in partnership with Independence, an established Russian car retailer with 12 showrooms in Moscow run by the entrepreneur Roman Chaikovskiy.
Russia is the biggest and fastest-growing car market in Eastern Europe with sales of 1.5 million cars last year. The share of the Russian market accounted for by foreign marques is forecast to rise from 38 per cent last year to 50 per cent by 2010 - equivalent to 900,000 cars a year. Toyota accounts for 10 per cent of all foreign-branded cars sold in Russia.
Inchcape will have a controlling 51 per cent shareholding in the joint venture with Independence. Together, the companies will invest $35m (£20m) in the two new dealerships in the south of the Russian capital.
Mr Lacroix said the deal with Independence would create a strong platform from which Inchcape could build a bigger presence in Russia.
He was speaking as Inchcape announced a 13 per cent increase in underlying pre-tax profits to £190.3m as earnings increased in five of its six territories. Profits in the UK, which account for about one-third of group turnover, rose 13 per cent to £29.2m despite a 5 per cent decline in the overall car market. Inchcape also did well in Hong Kong, Singapore, Belgium and Australia. The only black spot was Greece, where Inchcape's Toyota and Lexus franchises suffered a significant sales decline on 2004.
Mr Lacroix would not be drawn on whether Inchcape planned to respond to the wave of consolidation taking place in the UK car retailing market. In the past three years, it has increased its UK sales by £300m through the purchase of 24 dealerships from rival retailers, but these have tended to be small, "bolt-on" acquisitions.Reuse content