The company is controlled by Iranian businessman Ali Madadi and owns dealers of the Opel, Chevrolet, Mazda, Citroen and Suzuki brands.
“Last year the sales of the Radacini group did not rise because of the falling market, but we kept our turnover steady thanks to the servicing and to contracts for utility vehicles. At the end of last year we delivered 50 Iveco Magirus utility vehicles for the fire brigade. At a price of around EUR200,000 per unit, they contributed to us holding on to our turnover,” said Nicolae Sorescu, the group’s general manager.
He adds that on the other hand high-volume sales were directly affected by imports of second-hand cars.
“So we estimate that the 2012 turnover has remained at around EUR100 million, similar to the 2011 level,” the general manager said.
The almost EUR10 million value of the utility vehicles makes up around 10% of last year’s turnover. Two years ago Radacini also took part in an auction for the border police, to which it delivered 456 Iveco Massif off-road vehicles.
It continues expansion
As for the expansion policy, last year Radacini also became a Citroen dealer, by opening a first showroom in Constanta and a second one in Bucharest’s Militari district, while in Galati it bought an Opel and Chevrolet dealership directly from the bank, after the previous owner, Gold&Platin, had gone insolvent.
“We will open another dealer in Brasov in April for the Honda brand.” He says depending on the price, the company will buy more dealerships, as it has done in Galati.
“On February 1 we will continue the dealership contract with Trust Motors for the Citroen brand. This is a situation where we both stand to gain and there is no problem for Peugeot and Citroen to have the same importer,” Sorescu said.
The company has invested over EUR1.2 million in the three new showrooms in Bucharest, for Opel, Chevrolet and Citroen, according to Radacini officials, with the amount also including personnel training.
“Why have we invested now? Because such an investment would have cost twice as much before the crisis. We wouldn’t say prices have diminished, only that they now reflect an accurate value,” Sorescu said.
As for the local market, the head of the Radacini group believes sales can continue to decline given that clients still favor second-hand imports.
“Now Romania has reached rock bottom, but we are digging even deeper. New car sales can continue to decline this year on the Romanian car market. But up to now the market was protected, this is how it was possible to sell over 300,000 cars in 2007,” Sorescu said.
Pollution tax, at its 11th modification
The government last week presented the ordinance draft replacing the pollution tax with an environmental stamp duty. This is the 11th modification of the first registration tax in force since January 1, 2007, also known as the environment or pollution tax. The modification comes after none of the previous versions were in line with the European legislation in force.
If introduced in its current form, the tax on non-Euro, Euro 1 and Euro 2 cars will be up to 90% lower than the current pollution tax, the Environment Ministry will have to take measures to keep cars in an advanced state of decay off public roads. The “Euro” norms divide cars into categories based on how much they pollute through their exhaust emissions.
“When Germany introduced the scrappage bonus, it also introduced an annual tax calculated based on emissions, thus encouraging the acquisition of new, less-polluting cars. In Romania there isn’t a national conscience that can determine clients to choose new cars for which taxes and VAT are due, while the state borrows money from the IMF.”
The proposed form of the stamp duty does not protect cars subjected to Romanian taxes, which is what car dealers and manufacturers make their living from,” said Sorescu.
He adds that the Romanian state lost over EUR300 million in VAT revenues from the 175,000 second-hand cars, which were imported directly from Western-European countries last year, not through Romanian-based dealers.
Car industry players now expect a renewed decline for the market this year, after they had predicted stagnation only a few months ago. They base their estimate on the fact that the new stamp duty favors second-hand cars and on the delay of the clunkers for cash program.
(English version by Daniela Stoican)