Interview of the General Director of “Muran” Company Ashot Shahmuradyan to Mediamax News Agency and Banks.am web-portal

- What is your assessment of the situation in the market of car crediting in Armenia? What is the dynamics of the given market in the course of the recent 1-2 years?

-At present, the market of car crediting in Armenia can be conditionally divided into two segments - primary and secondary car markets. The situation in the market of car crediting is relatively stable.

One should take into consideration the fact that credits - are banking products, and the car-dealers cannot have a considerable influence on its development, although we take up certain steps in that direction.

From this point of view, the 0% pre-pays for Ford cars, offered by us recently, can be considered a breakthrough – nothing of that kind had happened in Armenia before. It is natural that the consumer is interested in not only the pre-pay, but also the interest rate of the banks. The local banks put an accent on the decrease of the pre-pay, and the annual interest rate remains at quite a high level: 12-17% per year.

Of course, the banks are guided by the solvency of the representatives of the middle class, who have a stable and quite high income, but who do not have the necessary savings to buy a car on credit with a pre-pay of 30-50%. However, in Russia, for example, the annual interest rate for cars with such a pre-pay starts at 2%, and, naturally, the car-crediting there develops quicker than in Armenia.

- Are there any factors, which hinder the development of car crediting in Armenia?

- The development of car crediting is directly connected with the development of the whole market of financial services, in which the banks, credit organizations and insurance companies are involved. Today, all the participants of the market try to at most minimize their risks, preserving high interest rates. Meanwhile, leasing is one of the effective mechanisms of decreasing the risks while crediting. On the whole, the banks are reluctant to conclude leasing agreements, and we in fact do not have specialized leasing companies, whereas in Europe, the main suppliers of credits in the sphere of car trade are those leasing organizations.

The development of the banking sphere, the increase of the share of banking assets in the structure of the GDP of Armenia (the given index is lower here in Armenia than in Russia and in the neighboring countries) should become a good basis for the further development of the market of car crediting.

- What is your assessment of the cooperation of your companies with the Armenian banks?

- We cooperate with almost all the banks of the country basing on agreements to provide our potential consumers the opportunity to be the one to choose the credit conditions, which will be more suitable for them. We quite well understand that the long-term and constructive cooperation with the banking sector is the deposit of the stable development of our business, as well as of the whole real sector of national economy. I believe that the further development of the banking sector will continue being a basis for our mutually beneficial cooperation in the sphere of car crediting.

- How does the procedure of co-ordination of the sum of the primary payment, the interest rates, the term of crediting, etc take place between the car-dealers and the banks?

- It is natural that the definition of all those parameters requires a thorough and all-round analysis both from our side and from the bank. By means of negotiations with the banks, we try to find an optimal formula for car crediting for today. At that, we try to provide the customer as flexible a system of payment as possible, and I believe that we have reached the best results in the market. We try within the limits of the possible to assist the consumers receiving a credit, however, in any case the bank is to make the final decision.

- Do you carry out a statistics of what percentage of the cars, presented by your companies in Armenia, is sold on credit?

- Of course, we carry out statistical analysis of the sales and we separately mark the sales on credit. This allows us following the processes, which take place in the car market, the dynamics of its development, assessing our risks and elaborating strategic development plans basing on it. We can say that the number of customers, who buy cars on credit, has a tendency towards increasing. As of today, over the half, or, to be more exact, 55% of all the cars we sold, were purchased on credit. Given the further development of civilized economy relations in the country, I believe that the given index will continue to grow.

- Do you plan to sell cars on credit, without the participation of financial organization, in the future?

- To realize this or that type of crediting, one should have a corresponding license of the Central Bank of Armenia and the process of receiving a license is connected with many factors. We are not yet ready and do not see special necessity to become an individual player in the market of car crediting. Although, everything is possible in the prospect. It is known that credit programs, directly connected with this or that brand and realized by dealers, successfully function abroad. General Motors, Renault, Nissan and other companies, provide such programs.

There is another aspect as well - the realization of an individual credit program requires a large amount of free means. I think that the given issue is not that urgent in Armenia today.

- All the car-dealers in Armenia register a serious growth of sales. What is the situation with the sales of Nissan and other foreign brands, which you present in Armenia?

- The improvement of the economic situation in the country and the simultaneous increase of the well-being of the population have significant influence on the dynamics and the structure of the demand in the car market. The sales grow in both the primary and the secondary markets. It is notable that in this connection Nissan somewhat stands out against the background of other brands. There is a stable demand for cars in the middle price segment, and we have what to offer the potential consumers. From this point of view, Nissan is an ideal choice. On the other hand, we try to preserve the brand in the “premium” segment. Our expensive cars, just as it is in the whole world, remain indicators of the personal success and the social status of their owners.

Recently, the tendency towards the decrease of sales of Russian cars, at that, not only in Armenia, but also in Russia itself, is marked. Russian cars doe not meet the competition and systematically yield their positions to the more dynamic foreign competitors.

One can argue that there is a serious competition in the Armenian car market, and this is a challenge, which forces us to be more effective and direct our efforts to the full satisfaction of the demand and the needs of our customers.