Artyom Petrosyan: The automotive world is witnessing a significant increase in car production in China

18.06.2024 | 14:15 Home / News / Articles /
The car sector is evolving toward electric mobility (e-mobility). The word "e-mobility" is not only popular nowadays, but also meaningful. In a talk with Artyom Petrosyan, an expert in this subject, we attempted to determine Armenia's mobility on the global automotive map, the challenges it faces, and the country's stage of development.

- What is the current state of the automotive industry?

- When it comes to the automobile industry as a whole, electrification is becoming more prevalent. Electric vehicles are currently the most popular and widely advertised. This is the predominant tendency in recent years. Of course, the growth of electric vehicles around the world is uneven. Development occurs at varying rates and trends around the world.

- Which countries are leading in this field?

-Today, we see, in particular, the tremendous expansion of Chinese car production. To put it plainly, Chinese vehicle production has not always been among the best in the world. China, Europe, and America are the primary markets where electrification has obviously gained traction in recent years. That is, there is significant progress in the field of e-mobility.

-Please explain the term "E-mobility," as it is commonly used but is still imprecise?

-Actually, the term e-mobility is very comprehensive and multifaceted. It refers to the entire system and infrastructure of electric vehicles, such as electric cars, buses, motorcycles, bicycles, scooters that annoy many people, and so on. Regarding infrastructure, we may emphasize a fully developed system of electric chargers, power grids, and energy sources. In short, e-mobility encompasses all of these products and systems.

-You mentioned that Chinese car production has grown dramatically, why is this happening and how are traditional carmakers coping with electric car competition in this situation?

- It is actually extremely difficult for traditional carmakers to face the competition. It's a very complex area that involves many different, small and large links, and it's no coincidence that it's one of the areas with a very high multiplier effect. Sometimes we do not even realize that spare parts, components of a car of a brand we know are not produced in this country, but are supplied from another country to this car manufacturer. Another issue is that the transition to electric cars requires a completely different mindset, pace and approach. It is vital to stress the economic factor here because all industry in China (particularly vehicle manufacture) is state-sponsored: Chinese carmakers get significant governmental subsidies. Traditional automakers, primarily centered in Europe and America, do not receive the same level of government assistance; this is a traditional industry. Of course, non-competitive conditions arise. For example, none of the German companies we know of can receive the same government subsidy to sell electric vehicles as a Chinese automaker. On the other side, China is the world's largest market: a country with 1.4 billion people can afford to lead in this field. It is vital to stress the economic component here because all industry in China (particularly vehicle manufacture) is state-sponsored: Chinese carmakers get significant governmental subsidies. Traditional automakers, primarily centered in Europe and America, do not receive the same level of government assistance; this is a traditional industry. Of course, non-competitive conditions arise. For example, none of the German companies we know of can receive the same government subsidy to sell electric vehicles as a Chinese automaker. On the other side, China is the world's largest market: a country with 1.4 billion people can afford to lead in this field.

- Where does Armenia stand in terms of regional development? What are the sector's major issues?

- Armenia is most likely a regional leader. A variety of factors contribute to this. For starters, because the import of electric vehicles is exempt from customs charges and value added tax, which is naturally appealing to such businesses, consumers can purchase an electric vehicle at a lower cost. Furthermore, the relatively compact form of cities, towns, and villages enables the rapid establishment of a charging network. However, there are several issues that continue to impede the industry's quick expansion, such as a lack of charging stations or the unequal positioning of current charging stations. By the way, there is a global standard that requires one charger for every 6-7 cars. In Armenia, this network is still in its early stages. The cost of electricity at charging stations is also a roadblock, as it is more expensive than charging at home: I can compare the cost of charging electric cars with public chargers to the cost of gas-powered automobiles, so people do not yet perceive a substantial difference in terms of car efficiency. Another barrier is the issue of maintenance: there are few professional services in Armenia that can provide high-quality maintenance and repair for electric vehicles. Furthermore, maintenance personnel lack proper education and experience with electric automobiles. Furthermore, because electric vehicles are relatively new, many buyers are unaware of their benefits and possibilities. Alternatively, they lack experience: many have not had the opportunity to test them, thus they are cautious to choose this car unreservedly.

- What are the primary customer concerns regarding electric vehicles?

- Not only in Armenia, but all throughout the world, there is a sense of range anxiety about electric vehicles: if they have enough mileage to get from point A to point B in ordinary life. This is mildly displayed in Armenia due to the short distances. Even with consideration for geography, weather conditions, unequal distribution of infrastructure, and other factors, one good recharge will be sufficient to avoid stopping on the road to recharge.

- Is Armenia's infrastructure for electric vehicles developed?

- When it comes to infrastructure, let's start with public chargers, because an electric car may also be charged in your own garage or elsewhere. Consumers in the city typically have no trouble charging. The primary issue occurs while traveling outside of the city. It is critical that Armenia's significant road junctions that connect regions be equipped with quick charging stations, as the biggest issue with electric vehicles is the charging time. (Regardless of how fast the charging stations are, it still takes at least 25-30 minutes. In this sense, Armenia is still at a developmental stage.

- What is currently happening in Armenia's electric vehicle market, and what can be expected in the following years?

- Most electric vehicles in Armenia are inexpensive since they are imported through unofficial channels and lack special factory guarantees. And, because Armenians have little financial resources, the majority of people choose to acquire a car this way. I hope, and we are also striving to shape the correct consumer behavior so that cars with manufacturer warranties are imported into our country. By the way, the next question is about the future of these cars and what will happen to their recycling, especially because electric car batteries present major issues with recycling. And the solution to this problem is not just at the individual or dealer level; it is a matter of state policy.

- You mentioned unauthorized representatives; you personally operate a company that is an official representative of one of Armenia's most well-known vehicle companies. Could you please explain the advantage of purchasing a car via an official representative?

-First and foremost, being an official representative of a company entails responsibilities. Responsibility to consumers, business, and society. It is also an effective technique to influence consumer behavior. First, what kind of car are you providing, what guarantees do you have, and what are you ready to give in exchange? In addition, you must supply the consumer with technical professional assistance of appropriate quality, warranty, and post-warranty support, as "Andron" does. The buyer of a car from an official representative may typically be confident that he has a responsible and consistent partner; if there are any issues with his vehicle, he can contact this firm.

- The company you manage also imports Chinese electric vehicles. Did you take into account the aforementioned factors when importing a Chinese electric car?

- “Andron", a subsidiary of Shtigen Group, became the official representative of the Neta car brand in Armenia four years ago, most likely in response to the unique characteristics of the Chinese electric vehicle market. Furthermore, "Andron" has created and continues to create a new culture through its operations, offering high-quality service and boosting trust in electric vehicles.

- What challenges has your company conquered in terms of e-mobility, and what targets has it set for itself now?

- First and foremost, Andron is a firm founded on beliefs and values. It is critical for us to shape values and behaviors in the sphere of e-mobility. It is no accident that we operate under the principle that our objective is to develop a community of like-minded people, where everyone can be confident that they have a strong and loyal backbone.
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