Inchcape’s expansion investments are focused on the high growth and high margin Emerging Markets. We define Emerging Markets as markets in which we operate that have started to grow but have yet to reach a mature stage of development and are accordingly in the growth phase of the development cycle. These currently comprise Russia, China, the Balkans, the Baltics and Poland.
Russia
In 2006 we announced our entry into the Russian market via a joint venture with the Indepedence Group of Companies, one of Moscow’s leading independent car retailers. This partnership will open two retail and service centres in Moscow for Toyota, one of the most successful foreign brands in Russia.
We announced our second move in 2006 wth the acquisition of a majority stake in an already successful and established business in St Petersburg, Russia’s second largest market.
In 2007 we continued our expansion in St Petersburg with another step in the implementation of the Group’s multi brand retail footprint with the majority stake acquisition in businesses retailing Audi and Peugeot.
In 2008 we announced the acquisition of the remaining 24.9% in the Toyota/Lexus, Audi and Peugeot businesses in St Petersburg giving Inchcape 100% ownership of one of the largest automotive businesses in St Petersburg.
Russia is an exciting growth market. In 2007 the import market grew by 65% and is now over one and a half million vehicles a year.
The Balkans – Romania, Bulgaria & Fyrom of Macedonia
We have established a strong presence in the Balkans, distributing and retailing Toyota/Lexus, selling nearly 15,000 cars in 2007.
In Romania we have strengthened our network of independent dealers outside of Bucharest and are increasing our Retail presence in Bucharest with new large scale 3S (sales, service and spare parts) facilities.
Bulgaria is a smaller market where we command a leading position in the passenger car market. We are increasing our Retail presence in Sofia and developing our network in the countryside.
In 2007 the car market in Romania grew by 25% and in Bulgaria it grew by over 12%.
The Baltics – Estonia, Lativa & Lithuania
Inchcape operates vertically integrated retail in the Baltics for Ford, Jaguar, Land Rover and Mazda and retails BMW, Mitsubishi and Hyundai in the Baltics. In 2007 we sold over 4,000 cars.
As a result of acquisitions made in 2007 we have market leading positions in Latvia with over 10% market share and in Lithuania with close to 20% share of the market.
In the Baltics the car market grew by 34% in 2007.
China
The Chinese market has overtaken Japan as the number two market in the world. In December 2006 we completed construction, after less than 100 days, of our first Toyota greenfield site in Shaoxing. In January 2008 we opened a Lexus retail centre in Shaoxing and a third centre, Shanghai Lexus, is due to open in the third quarter of 2008.
We continue to look at greenfield and acquisition opportunities to build scale in the three biggest regional markets in China; Shanghai, Beijing and Guangzhou.
Poland
In Poland Inchcape retails BMW and MINI.