Romanian Auto Cos To Hike Post-Sale Service Tariffs To Maintain Profits – Official

“The operating margins are decreasing, and not just in our case (Porsche Romania dealership – e.n.) but for all players on the market. Some of the reasons include increasing, tighter competition, the pressure put on prices, the increasingly difficult market and a swift in focus from large cars segment to the segment of small cars. All in all, it is natural that operating margins are decreasing,” said Brent Valmar, APIA’s vice-president and general manager of Porsche Romania.

On the other hand, revenues from post-sale car services are increasing, Valmar said.

He said the revenues from post-sale services will balance the loss registered on the retail segment.

Post-sale car services in Romania are at some 30% of the tariffs on markets in western Europe, which limits car traders’ revenues, Valmar mentioned.

On the other hand, hiking post-sale car services might be difficult in Romania, as the country’s market and the purchase power do not allow a steep increase in the tariffs, Valmar said.

Romania’s new car sales reached 366,819 units in 2007, up 23.4% on the year.

APIA officials expect an increase of only 5% in 2008, on higher imports of used cars and unchanged decommissioning bonus for old cars.