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Frontpage Divisions Car and machinery trade

Car and machinery trade

The car and machinery trade segment consists of VV-Auto and Konekesko with their subsidiaries. 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, marketing and after-sales services of recreational machinery, construction and materials handling machinery, agricultural machinery, and buses and trucks. Konekesko operates in Finland, Estonia, Latvia, Lithuania 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

Car trade market

In 2010, 111,968 passenger cars and 11,045 vans were registered in Finland.

The passenger car market grew by 23.6% from the previous year, while the van market increased by 27.3%. Volkswagen ranked second in the registration statistics of both passenger cars and vans. Audi continued as the number one premium brand. Seat's market share increased clearly over the previous year.

Machinery trade market

The market for recreational machinery totalled some €300 million in Finland. In spite of the improvement in the general economic situation, the export market for boats declined.

The market for construction machinery remained at a low level, totalling some €300 million in Finland, the Baltic countries and St. Petersburg.

The combined market for agricultural machinery in Finland and the Baltic countries was some €500 million and the outlook improved towards the end of the year as the price of grain increased.

The market for trucks (weight class of over 6 tons) was approximately €500 million.

Konekesko disposed of its grain and agricultural inputs trade in the Baltics in 2010 and concentrates on the machinery trade, in line with its strategy.

Year 2010

In 2010, the net sales of the trade segment were €955 million (€947 million), an increase of 0.8%. Comparable net sales increased by 15.1%. The impact of the car tax change (starting from 1 April 2009) and the disposal of the grain and agricultural inputs trade in the Baltic countries have been eliminated from comparable net sales. The operating profit excluding non-recurring items was €33.1 million, €32.7 million more than in the previous year.

VV-Auto's net sales were €668 million (€598 million), an increase of 11.7% from the previous year. During the first part of the year, the net sales performance was negatively affected by the car tax change, effective since 1 April 2009, as a result of which the car tax is no longer included in the net sales. VV-Auto's comparable net sales increased by 19.1%.

In terms of vehicle numbers, VV-Auto's own outlets in the Greater Helsinki area and Turku accounted for more than one third of the total sales of new Volkswagen, Audi and Seat vehicles.

Audi Center Airport, the first Audi building in Finland complying with the new concept, was opened in Aviapolis, Vantaa. In addition to the Audi outlet, the building also houses the Audi service workshop and maintenance premises, a used car outlet and new premises for Volkswagen, Audi and Seat imports. The renovated Volkswagen Center Airport was opened earlier in the spring. The planning of the expansion and renovation of the new Volkswagen Center in Espoo and Volkswagen Center in Turku started in 2010.

Owners of Volkswagen passenger cars are served by a network of 40 dealer shops and 60 service workshops, while there are 41 dealer shops and 59 service workshops for Volkswagen commercial vehicles. The corresponding figures for Audis are 21 and 25. Seats are sold by 22 dealers and maintained and repaired by 40 workshops in Finland and four in the Baltic countries.

The Volkswagen range continued to expand. Launches included the revised Touareg, Touran and Phaeton, and a completely new Sharan MPV. New Passat and Passat Variant were introduced in late 2010. Volkswagen Commercial Vehicles launched a revised Caddy range. The Audi range was complemented with new Audi A1 and A7 Sportback models. The most important new Seat arrival for the year was Ibiza ST.

Konekesko's net sales were €287 million, down by 17.9% from the previous year. The decrease can be attributed to the disposal of the grain and agricultural inputs trade in the Baltics. Konekesko's comparable net sales increased by 6.2%.

In Finland, Konekesko's range of Yamaha products includes motorcycles, mopeds, ATVs, snowmobiles, outboards and PWCs, which are sold to consumers by the network of 130 Yamaha dealers. Konekesko's own boat brands are Finnish Yamarin and Suvi, in addition to which Konekesko launched the new aluminium-frame Yamarin Cross range in October 2010. Yamaha outboard motors have been the market leader since 1977 and they accounted for 44.7% of all outboards registered in 2010. Konekesko (Yamarin, Suvi, Linder, Zodiac) accounted for 17.2% of all registrations of new boats in 2010. In 2009, Yamaha also became the market leader in two wheelers; in 2010 the brand's market share in motorcycles was 17.5% and in mopeds 8.5%.

Construction, materials handling and environmental machinery is marketed in Finland, the Baltic countries and Russia (St. Petersburg), through Konekesko's own dealer network. Konekesko expanded the Still forklift business to the Baltics and Russia, and started the representation of German Sennebogen materials handling machinery in Finland and the Baltics. Other best-known product brands represented by Konekesko are New Holland, Case, Kubota, Manitou and Grove.

Konekesko sells tractors, combines and their spare parts in Finland and the Baltic countries. Konekesko also sells agricultural implements in the Baltics. The best-known brands represented by Konekesko include Massey Ferguson and Claas.

In Finland, Konekesko sells MAN trucks, and MAN and Neoplan buses through its own dealer network. The market share of MAN trucks remained at the level of the previous in Finland.

Objectives and strategic emphases

VV-Auto and Konekesko represent the leading brands in their market area and are responsible for the sales and after-sales services of these brands either through their own or dealer network. The dealer network is complemented by a network of contract service centres.

Strengths in the car and machinery trade include well-known brands and a wide product range, high-quality products and services, strong regional dealers, efficient logistics, expert staff and an own chain of retail outlets in the car trade.

In 2011, the passenger car market is expected to increase by about 10%, mainly due to the need to replace existing vehicles, while the van market is expected to grow by some 25%. The machinery trade market is expected to grow slightly in the whole operating area of Konekesko.

The trade segment's objectives for 2011 include increasing the market share of the brands it represents, further developing the dealer and maintenance network, and improving customer satisfaction and profitability. The focuses will be strengthening the selection of products and services and increasing electronic customer communications.

 

K-Group's car and machinery trade, number of stores, and retail and B2B sales
	Number		Sales, (VAT 0%) € million
	2010	2009	2010	2009
VV-Auto, retail outlets	9	9	334	307
VV-Auto, imports	1	1	354	307
Konekesko, Finland	2	2	193	191
Finland, total	12	12	881	805
Konekesko, Estonia			29	33
Konekesko Latvia			40	92
Konekesko, Lithuania			28	29
Konekesko, Baltic countries, total			97	154
Car and machinery trade, total	12	12	978	959
Car and machinery trade segment’s key figures			2010	2009
Net sales		€ million	955	947
Operating profit		€ million	33.9	-5.1
Operating profit excl. non-recurring items		€ million	33.1	0.3
Operating profit as % of net sales excl. non-recurring items		%	3.5	0.0
Investments		€ million	17.8	13.4
Return on capital employed* excl. non-recurring items		%	19.6	0.1
Personnel average			1,138	1,291
* cumulative average
Car and machinery trade segment's net sales in 2010			€ million	change, %
VV-Auto Group			668	11.7
Konekesko, Finland			193	1.2
Konekesko, Baltic countries			96	-41.0
Total			955	0.8
Car and machinery trade segment’s capital employed at 31 December, € million			2010	2009
Non-current assets			85	96
Inventories			165	157
Short-term receivables			58	67
./. Non-interest-bearing debt			-130	-83
./. Provisions			-14	-15
Capital employed**			164	222
** capital employed at the end of month