The global dealer, which owns Inchcape represented in 40 countries, is looking for buyers for its assets in Russia. The company’s Russian subsidiary, which has around 20 dealers in Moscow, generated revenues of £750m in 2021, about 10% of its global volume. The holding cites events in Ukraine as the main reason for exiting the Russian business.
“In light of the current circumstances, we conclude that the ownership of the Group’s assets in Russia is no longer reasonable,
– Says the official representative of Inchcape (it is on socialbites.ca). “Therefore, we have started the process of transforming our business in Russia together with our partner automakers.”
Until now, Inchcape auto centers in Russia continue to operate as usual.
“The company really sells its business, but at the same time continues to fulfill all its obligations to customers”,
– explained to socialbites.ca on the helpline of the dealer holding.
The international dealer holding Inchcape entered the Russian market in 2006 and acquired a controlling stake in Moscow dealer Musa Motors in 2008. Currently, Inchcape has 19 dealerships in the Moscow region, the portfolio includes brands such as BMW, Mini, Rolls-Royce, Jaguar Land Rover, Exeed (Chinese Chery’s luxury division), Volvo, Toyota, Hyundai, Genesis and Mitsubishi.
According to the SPARK-Interfax database, the Belgian offshore Inchcape International Group BV is the sole participant of Inchcape Holding LLC. According to Russian accounting standards, in 2020 the company made a net profit of 118 million rubles, with a turnover of 8.3 billion rubles. The Russian subsidiary has not released any more up-to-date data.
The British have been trying to get out of the Russian business for a long time, information about the sale of Inchcape appeared in the media in 2015. In 2021, the British company acquired the Russian conglomerate KlyuchAvto for £70 million (about $92 million) in St. Petersburg to four dealerships – two of which sell and service Toyota cars, and two – Lexus and Audi.
Before the geopolitical and economic situation changed,
the estimated cost of the remaining Inchcape auto centers was around 350-400 million euros,
Sergey Burgazliev, an independent consultant in the automotive industry, notes that in current conditions the buyer of such an enterprise has the right to count on a significant discount.
Burgazliev told socialbites.ca: “The demand for this asset could be quite good, given its presence in the portfolio of brands such as Hyundai, Toyota, Mitsubishi and Chery, which have not announced that they have ceased operations in Russia,” he told socialbites.ca. — First of all, Inchcape may be of interest to large dealer conglomerates that do not have such brands in their portfolio.
The advantages of Inchcape are the existing dealer contracts and good locations in Moscow.”
On the other hand, a potential buyer could go into this deal to expand its presence in brands in the Inchcape portfolio and prevent its competitors from doing so, he adds.
“Unfortunately, Inchcape did not fully anticipate the possibility of selling the business at market value to one of the large interested buyers, who are probably not very numerous in Russia.
Now time is wasted and this work can only be sold with a 35-40% discount,” he said.
Burgazliev believes.
Denis Migal, director of the Fresh Auto car dealership network, says the most logical option for the British seems to be a nominal sale of the asset to their own Russian administration.
“I don’t think there will be a real deal.
Most likely, some shareholders will be added to the directors from within the holding. In an interview with socialbites.ca, Migal argues that so Inchcape can declare politically its separation from Russia, but will actually relinquish control over itself. “As soon as the situation improves, the company will have the opportunity to expand its operations again. This is the only option for a competent exit from the Russian market. The alternative is to drop everything and sell cars and assets.”
Inchcape’s investments in Russia have long paid off during the company’s work in our market, so we can only talk about losses in terms of lost profits, adds Migal, adding that it is now possible to seamlessly sell franchises at the property and fixed asset price only. .
“Currently none of the holdings are in St. Petersburg is not ready to buy the Inchcape business. The prospects for brands and the revenue of the dealer business are uncertain. In addition, such a purchase does not seem appropriate with the current loan interest rates,” said the source of the publication and evaluated the situation.
Source: Gazeta
