Online yes, put it down: dealers demand to ban the sale of cars on the Internet
The automotive market is undergoing a major transformation, which is giving rise to discussions about what it should be like in the near future. Dealers propose to ban online sales of cars by manufacturers and distributors to the end user. The Russian Car Dealers Association (ROAD) has sent a corresponding appeal to the Federal Antimonopoly Service with a request to include the restriction in the National Competition Development Plan for 2026-2030 (Izvestia has the document). The proposal caused heated debate among market participants, experts and government officials. Izvestia figured out the details.
Online is not a competitor, but a challenge.
ROAD believes that direct online car sales can seriously damage competition and consumer rights. According to Vera Pavlova, a representative of the press service of the association, dealers do not just sell cars, but ensure the development of a competitive environment and service infrastructure.
— Consumer protection and support for competition — sellers compete with each other, which helps to improve the quality of service and lower prices for goods and services, — they say in the ROAD. — In addition, dealers have the necessary service facilities for car repair and maintenance, which manufacturers or distributors often lack.
The Association also warns about the risks that may arise when implementing direct sales. According to Pavlova, the development of such schemes "may lead to infringement of the rights and interests of other participants in the retail market (dealers), the imposition of deliberately unfavorable terms of cooperation," such as the supply of illiquid shipments, price fixing, territorial division of the market and the forced introduction of agency schemes. She also emphasizes that it is dealers who create jobs, pay taxes, and invest in infrastructure development, including in remote regions.
The Federal Antimonopoly Service confirmed receipt of the appeal and promised to analyze the feasibility of its inclusion in the National Competition Development Plan, and also promised to work together with other federal executive authorities.
At the same time, from the point of view of automakers, the ROAD initiative infringes on consumer rights. Igor Korovkin, executive Director of the Association of Automobile Manufacturers of Russia, is confident that "banning direct online car sales will violate consumers' rights to purchase cars and the choice of where to buy should remain with the consumer." At the same time, it is obvious that for dealers this is a loss of part of their income, he clarifies.
He adds that the service component will not disappear anywhere — at least under warranty.
— During the warranty period, after-sales service will be maintained at car manufacturers' service centers or at dealerships accredited by car manufacturers. And then where to be serviced is decided by the car owner himself. Everything is as it is now," the expert states.
Russian Senator Olga Epifanova considers the development of online formats in the retail industry inevitable, although she admits that the market retains its peculiarities.
— It is impossible to prohibit the market from developing. Trading is increasingly moving online, and this is a natural course of events with the development of digital technologies. However, offline sales have not disappeared and will not disappear for a long time. <...> Especially if we are talking about a car that has not yet become a consumer product," the senator points out.
In her opinion, the future of dealers is in transformation, and dealerships will outlast themselves as sales centers.
"The market is changing, familiar trading formats are becoming obsolete, new ones are emerging, it's a matter of time that cannot be slowed down or reversed," Epifanova sums up.
A number of interviewed sources among Russian automakers told Izvestia that dealers are now most afraid of direct sales from automakers themselves, which would dramatically reduce the cost of cars and increase their marketability.
Izvestia sent requests asking for their position on this issue to the Ministry of Industry and Trade, the Ministry of Energy, the Ministry of Transport, the SME Corporation, the Analytical Center of the Government of the Russian Federation, and the Chamber of Commerce and Industry.
Not online, but a hybrid
There are other points of view in the dealer community. Andrey Olkhovsky, General Director of Avtodom Group, is confident that the boundary between online and offline is now arbitrary.
— There is no definition of online car sales. A customer cannot have their car delivered to their home by courier. Getting money online and handing out a car at an offline dealership — is it online or a hybrid? — the expert asks.
He believes that the dealer network is not an intermediary, but a key element of the system, and only through it can after—sales service issues be resolved.
— The car has not learned how to repair itself online... We still need a living person who conducts an assessment," Olkhovsky states.
Oleg Kuznetsov, Deputy General Director for Digital Transformation of Avtodom Group and Avtospeccenter Group, cites two scenarios of online sales observed in the market. In the first case, the importer puts up cars at a better price and they sell out in hours. In the second case, the prices are the same, but the dealer is given a discount, he himself is interested in selling online. In his opinion, for a dealer network, direct sales without intermediaries means, of course, increased competition in the supply, which means a deterioration in profitability, up to the closure of dealerships of the brand that has gone online.
The expert emphasizes that a car is a complex product.
"If importers go into repairs on their own, they will need large investments and, most likely, they will still switch to concluding service partner agreements with car dealers," Kuznetsov believes.
In turn, the Ozon press service adds that, for example, dealers themselves are car sellers on Ozon. They provide customers with after-sales service and warranty, thus playing a key role in the sales process.
An online market without dealers is impossible
Government intervention and a subsequent ban are unlikely, says Maxim Agadzhanov, Managing Director of Alfa-Leasing Group.
"I don't think the ROAD initiative will be approved by the Federal Antimonopoly Service, as the draft decree approving the National Competition Development Plan for the next five years provides for increasing the share of online car sales to 5% by 2027," he notes.
In addition, the Federation Council has already refused to support the association's proposal, pointing out that the costs of dealers should not be borne by the consumer, but rather the maintenance of showrooms, warehouses and service facilities, etc.
At the same time, Agadzhanov emphasizes that the role of dealers does not disappear even with online sales, since dealer networks are needed for direct online transactions from manufacturers and distributors. After all, the delivery of cars purchased online is carried out with their help, as well as the repair and maintenance of vehicles.
He also draws attention to the general drop in demand for new cars.
"In the first two weeks of May, almost 30% fewer representatives of this segment were sold than in the same period last year," the expert recalls.
Vladimir Poklad, Director of the Management Consulting Department of the Business Profile Group, offers a systematic view of the problem. He sees the pros and cons of both models.
"Banning direct online car sales can both strengthen and weaken competition in the retail market. <...> Direct sales allow companies to offer more transparent conditions, reduce costs and provide additional advantages to customers,— the Izvestia source believes.
He notes that digitalization carries both risks and opportunities. The first is related to the fact that the development of direct sales can lead to a redistribution of market shares and pressure from manufacturers. However, these risks are not unique to retail — similar processes have occurred in many industries during the transition to digital sales formats.
Poklad concludes that "instead of a complete ban on direct sales, it would be more logical to develop a model in which online sales complement traditional channels rather than displace them, ensuring a balance of interests between manufacturers, dealers and consumers."
In any case, Valery Kuzmin, managing partner of AAA Trakservice, is confident that the market will regulate itself, leaving strong brands and companies that can negotiate and cooperate both at the distributor–dealer and dealer–buyer levels.
— None of the manufacturers, especially Chinese ones, will want to invest in their own customer service station network across the country, without which it is impossible to build high-quality distribution, neither online nor offline. Therefore, dealers' efforts here can also be aimed at terminating contracts and avoiding brands that want to sit on two chairs at once or make online a priority. The consumer will win in the end, and that's the main thing," concluded the dealer market participant.
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