Frontpage Divisions Car and machinery trade

Car and machinery trade

VV-Auto and Konekesko make up the car and machinery trade division.

VV-Auto imports and markets Volkswagen, Audi and Seat passenger cars, and Volkswagen commercial vehicles in Finland, and it also imports and markets Seat passenger cars in Estonia and Latvia. VV-Auto is also engaged in car retailing and provides after-sales services at its own outlets in the Greater Helsinki area and Turku.

Konekesko is a service company specialising in the import and sales of construction, environmental and agricultural machinery, trucks and buses, and recreational machinery. Konekesko operates in Finland, the Baltic countries and Russia. Konekesko arranges the manufacture of and sells Yamarin boats in Finland and exports them to several European countries and Russia.

Leading brands and
comprehensive services

VV-Auto’s market

In 2009, 90,574 passenger cars, 8,677 vans and 3,173 trucks were registered in Finland. The passenger car market decreased by 35.2% from the previous year. Registrations of new vans fell short of the previous year by 44.1% and those of trucks by 39.1%.

The market position of the brands imported by VV-Auto strengthened. Volkswagen increased its market share and was in second place in the registration statistics of both passenger cars and vans. Audi maintained its position as the number one premium brand. Seat’s market share decreased slightly over the previous year. The car taxation that is based on carbon dioxide emissions increased the share of passenger cars with lower emissions and the popularity of TSI, TFSI and TDI motors which place less of a burden on the environment.

The Volkswagen range continued to expand. Launches included the revised Golf Plus, the new Polo and Golf Variant. The range of EcoFuel natural gas vehicles was complemented with the Passat Variant, Touran and Caddy Maxi. The revised Transporter range was introduced in late 2009. The Audi range was complemented with the new Audi A5 Sportback and Cabriolet. Seat arrivals of the year were the Seat Exeo and Exeo ST and the revised Altea, Altea XL, Leon and Ibiza SC.

In 2009, the market share of Volkswagen passenger cars in Finland was 12.6% and the Volkswagen Golf was the best-selling passenger car in the country. The market share of Volkswagen vans was 20.9%. Audi had a market share of 4.7% and Seat’s share was 1.0%. Seat’s market share in Estonia was 1.0% and in Latvia 0.5%.

Konekesko’s market in Finland,
the Baltic countries and Russia

Konekesko’s sales of recreational machinery are based on close and long-term cooperation with Yamaha Motor Co. Quality-minded customers are served by the comprehensive Yamaha dealer network. The Finnish market for recreational machinery totalled some €300 million in 2009.

In addition to farmers, Konekesko’s most important customer groups in heavy machinery include construction, materials handling, transportation and service sector companies, and towns and municipalities.

Construction and environmental machinery is marketed in Finland, the Baltic countries and St. Petersburg through Konekesko’s own dealer network. The construction market declined considerably in 2009, amounting to about €200 million in Finland, about €50 million in the Baltic countries and about €50 million in St. Petersburg, Russia.

Konekesko sells tractors, combines and their spare parts to farmers in Finland and the Baltic countries. In the latter, Konekesko also sells agricultural implements. The best-known product brands represented by Konekesko include Massey Ferguson tractors and Claas combines. The market for agricultural machinery in Finland is some €400 million and in the Baltic countries some €200 million.

In Finland, Konekesko sells MAN trucks, and MAN and Neoplan buses through its own dealer network. The market for trucks (weight class of over 6 tons) is approximately €300 million. 146 MAN trucks and 14 buses were registered in 2009.

Strengths

At the beginning of 2009, VV-Auto and Konekesko were combined and reorganised to form the car and machinery trade division. The new division structure aims at synergy benefits and the development of sales and maintenance services.

VV-Auto and Konekesko represent the leading brands in their market area and are responsible for the marketing and sales of these brands. They also offer diversified after-sales services to their customers either through their own or a contract service network.

Strengths also include the wide product selection, high-quality products and services, a comprehensive network in several countries, efficient operating methods, skilled and service-oriented staff, and its own chain of retail outlets in the car trade.

Year 2009

In 2009, the net sales of the segment were €947 million, a decrease of 36.0%. The operating loss excluding non-recurring items was €0.3 million, €30.1 million less than in the previous year.

VV-Auto’s net sales were €598 million, a decrease of 32.3% from the previous year. The net sales performance was affected by a decline in the car market, coupled with the car tax reform effective since April, as a result of which the car tax levied on cars after 1 April 2009 is excluded from the net sales. Taking the impact of the tax change into account, comparable net sales fell by 24.3%.

In terms of vehicle numbers, VV-Auto’s own outlets in the Greater Helsinki area and Turku accounted for about one third of all new Volkswagen, Audi and Seat retail sales.

VV-Auto’s retail sales network consists of 40 dealer shops selling Volkswagens and 59 service workshops, and 41 dealer shops and 58 service workshops for Volkswagen commercial vehicles. The corresponding figures for Audis are 17 and 39. Seats are sold by 23 dealers and maintained and repaired by 40 workshops in Finland and three in the Baltic countries.

A centralised customer relationship management system was adopted at all VV-Auto’s own outlets. The construction of VV-Auto’s new office building started in Veromies, Vantaa. The building will also include a new Audi outlet with a service workshop, maintenance and warehousing premises. The Volkswagen outlet and workshop located on the adjacent site will also be renovated and expanded during the process.

Konekesko’s net sales were €350 million, down by 41.3% from the previous year. This can be attributed to the decline in the machinery market and a decrease in the Baltic grain and agricultural inputs trade.

As the general economic situation deteriorated, the average sales of recreational machinery in Finland declined by about 30%. Sales of boats also dropped considerably from the previous year in the most important export markets (Norway, Sweden). Konekesko started importing and selling Linder boats in December 2009.

The Finnish and the Baltic market for construction and environmental machinery declined to less than half of the previous year, but Konekesko’s market position strengthened. Konekesko returned to the warehousing technology business with Still forklifts and BITO storage systems and started the imports and sales of Dynapac compaction and paving machines in the Baltic countries.

The market for agricultural machinery dropped by about 30% in Finland and by some 50% in the Baltic countries. Konekesko’s market share of combines increased to 26.3%, but in the tractor trade the market share dropped to 14.0%.

In Finland, sales of MAN trucks declined more than the market, and the market share was 5.7%.

Objectives and strategic emphases

The segment’s objectives for 2010 include increasing the market share of the brands it represents, further developing the dealer network and improving profitability. The focuses will be expanding the selection of products and services and improving electronic customer communications. The car trade will continue to focus on the development of its own chain of retail outlets and expanding the adoption of the centralised customer management system. In line with its strategy, Konekesko will also concentrate on the machinery trade and dispose of its grain and agricultural imputs trade in the Baltic countries

 

 

Market shares

VV-Auto
Finland:
Volkswagen passenger cars 12.6%
Audi passenger cars 4.7%
Seat passenger cars 1.0%
Volkswagen vans 20.9%
(Transport Safety Agency TraFi, Vehicular and Driver Data Register)
Estonia:
Seat passenger cars 1.0%
Latvia:
Seat passenger cars 0.5%
(Estonian and Latvian car dealers associations)

Konekesko
Finland: market share 6–41%, depending on product group (own estimate)
Estonia: market share 20% (own estimate)
Lithuania: market share 20% (own estimate)
Latvia: market share 30% (own estimate)

K-Group’s car and machinery trade, retail and B2B sales
	Number		Sales (incl. VAT) € million
	2009	2008	2009	2008
VV-Auto, retail outlets	6	6	374	489
VV-Auto, imports	1	1	372	605
Konekesko, Finland	2	1	230	351
Finland, total	9	8	977	1,445
Konekesko, Estonia			38	69
Konekesko Latvia			102	152
Konekesko, Lithuania			35	55
Konekesko, Baltic countries			175	276
Car and machinery trade, total	9	8	1,152	1,721
Car and machinery segment’s key figures, continuing operations			2009	2008
Net sales		€ million	947	1,480
Operating profit		€ million	-5.1	30.5
Operating profit excl. non-recurring items		€ million	0.3	30.4
Operating profit as % of net sales excl. non-recurring items		%	0.0	2.1
Investments		€ million	13.4	15.6
Return on capital employed* excl. non-recurring items		%	0.1	10.8
Personnel average			1,291	1,451
* cumulative average
Car and machinery segment’s net sales, continuing operations			€ million	change, %
VV-Auto Group			598	-32.3
Konekesko, Finland			185	-31.9
Konekesko, Baltic countries			165	-49.3
Total			947	-36.0
Car and machinery segment’s capital employed at 31 December, € million			2009	2008
Non-current assets			96	99
Inventories			157	255
Short-term receivables			67	89
./. Non-interest-bearing debt			-83	-127
./. Provisions			-15	-15
Capital employed**			222	302
** capital employed at the end of month