ERA-GLONASS spoiled dealers' sales plans

Audi, BMW and Mitsubishi stopped the supply of a number of models to Russia. In total, the consumers were deprived of more than 10 models.
13.01.2017
Fontanka
Origin source
The reason was the mandatory requirement to install the ERA-GLONASS emergency call system in all vehicles produced in Russia and imported from abroad, which entered into force on January 1. According to dealers, the list of cars that can not be bought, is not yet complete, but to find out, whether any particular model is available, one needs to make an order. 

For example, since the beginning of the year Audi ceased to import TT, R8, A8, i A1, as well as A3 and the A5 Cabriolet cars to Russia.

"Since the development and subsequent certification in accordance with the new security requirements entail big investments, it was decided not to introduce the ERA-GLONASS emergency call system on a number of models," explained the press-service of the company to Fontanka. 

Three models: A8, R8 and TT, will not disappear at once, as in the past year the importer brought "a sufficient number of these models to ensure the demand for them in 2017" in Russia. 

BMW, too, limited its product range. Since January 1, there will be no supply of cabriolets: 4-Series (including M4) and 6-Series (including M6), as well as hybrid i8, hatchback 5-Series GT, and M3 sedan.

Mitsubishi gave up its hybrid SUV Outlander PHEV.

According to dealers, the rejection of deliveries is associated with the inconvenience of certification under the requirements of ERA-GLONASS. The fact that it requires a series of crash tests that reproduce the frontal and side impacts.

"The cost of the procedure consists of three or four broken machines. Accordingly, the more expensive is the model and the less it is sold, the less profitable it is for the manufacturer to equip this system,"- said the managing director Autobiography car dealer, Vladimir Khvostov, to Fontanka.

This list of "drop-outs" can not be considered closed, traders warn.

"Officially, we have not notified the importers, which models probably will not be equipped with ERA-GLONASS," says the executive director of Axel Group (dealer of VW, Toyota, BMW and others), Alexander Kumpan. That is, in the case of non-mass models, which are available on request, surprises are possible: the client may find out that the desired car is not certified, only upon contacting with the dealer, who will make a request to the importer.

In assessing the impact of the disappearance of these cars on the market, the participants disagree. For example, according to the director of Audi Vyborgsky Center, Yury Terentiev, five of the six models, which Audi stopped supplying, are niche products that occupy less than 5% of total sales.

"Customers show understanding," he says.

But the hit Audi A8 will be released in a new version with ERA-GLONASS in the fall of 2017, and until that time the sellers intend to hold on with the old stocks.

Less optimistic is the head of Phoenix Motor and vice-president of the Russian Auto Dealers Association (RADA), Vyacheslav Zhigalov.

"Although these models occupy a small share of the sales, they were important. For the brand's image it is bad, when there is no diversity: even if people don't buy a lot of droptops, they should be in the showroom to avoid boredom," he stressed.

In addition, the entrepreneur believes that because of ERA-GLONASS Audi decided not to launch a new model of Q2 to the Russian market, with which dealers associated high hopes.

"From a security point of view, ERA-GLONASS doesn't make any sense at the moment. I doubt that the control center will be able to in real time to process messages from all vehicles (for example, if there's any sign of an accident like airbag deployment, the system transmits coordinates, time and number of the car to emergency services) in the territory of the Russian Federation," says Vyacheslav Zhigalov.

The only result, according to the businessman, is rise in price of cars and reducing range, which is already thinned out after the collapse of the ruble.

"How it is tied to the promise of the state to support the automotive industry, is not clear," stressed Vyacheslav Zhigalov.

According to Yury Terentiev, the range of Audi has risen in price by 2.5% since the beginning of the year, although to assess the role of ERA-GLONASS in it is difficult, he said.

Not only niche model may disappear from the market, but also the mass ones, at least for a while. Many importers planning to release a new version of popular cars in the spring or autumn 2017, decided not to spend money on the certification of the existing models, hoping to hold on stocks or to import machines under the old certificate, says Vadim Arustamyan, Director General of Maximum Holding (dealer of Honda, Mitsubishi, Hyundai).

For example, Hyundai decided not to install ERA-GLONASS on Hyundai i40.

"The updated Hyundai Sonata will soon replace this model, which will be equipped with the above system," explained the press-service.

The launch of Hyundai Sonata in Russia is scheduled for autumn 2017. Until that time, the company expects to continue to import Hyundai i40, since the approval for the supply was received prior to the entry into force of the technical regulation requirements, and clarification from the relevant ministries and agencies leave certain hope.

But the market participants are not sure that the customs will let in the car with old approvals. "Many popular models, just in case, were delivered in December to the maximum. But there's no guarantee that they are enough to last until the autumn, when supply disruptions happen," says Vadim Arustamyan.

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