Interview with Bohdan Kulchyckyj for “A-95”
2009-01-21А95:
Car sales and consequently car dealers’ profits drop month after month. Will they not try to get their profits back by raising their technical service fees and parts prices?
Bohdan Kulchyckyj:
Now, if we talk about technical service, they may, but they will not. There was plenty of competition even earlier, so dealers did not earn much just by selling cars. The large portion of the income came from servicing. So in the current demanding financial environment, a lot of competition between dealers will be in the servicing market. And strong competition means low prices. But it is important to understand that prices for parts used during service and repair are set by dealers, not by the car importer. However, if servicing becomes more expensive, in time customers may think that it is actually too expensive for them, and dealers must take this into account.
А95:
Based on US experience of crisis management, what kind of behavior strategy would you recommend to your customers?
Bohdan Kulchyckyj:
As to our fleet customers, in this matter they actually can give a lesson or two to anyone. For example, automotive business in Ukraine goes through crises almost all the time. We have already had several this year. In early 2009 euro exchange rate grew, which affected our company, since we bring our cars from Europe. Then the country joined the WTO and the cost of cars imported to Ukraine before that date automatically went up by 10-11%. Afterwards, Ukraine entered a political crisis, though I must admit that in the times of political tensions our sales increase. I have no idea why. Maybe because no new laws which could harm our business are passed during such periods…
А95:
Car showrooms now offer incredible, unheard-of in Ukraine. Why is this happening? And the main question – how much time do potential buyers still have to take advantage of this fabuluous generosity of car dealers?
Bohdan Kulchyckyj:
Taking into account the state of global economy, nobody can give an accurate prediction for automotive market - we will just see how things will turn out. For instance, a couple of months ago, there were a lot of pre-orders for cars, but later many customers just cancelled and did not pay the money. In Ukraine, the most profitable months were usually November and December. In October, orders still kept coming, cars were ordered, but when it came to sales… And the problem is not only prices - for many customers it is important to be able to buy a car on credit, and banks are not very eager to finance such purchases. A lot of factors come together, since nobody expected such developments in economy in general, in demand, in solvency, in car credit business. That is why dealers give such significant discounts, and sometimes these discounts are truly unheard-of. I cannot say how long these special offers will last - it is up to dealers, and dealers make decisions based on the urgency of their own tasks. So I advise to those who are considering buying a car at the moment: do not put off your purchase, since discounts may end very suddenly, and new prices for cars may unpleasantly surprise you.
А95:
Ford company is something like an idol to Americans. But Europe has its own idols. How much do American Fords differ from European Fords?
Bohdan Kulchyckyj:
Very much. Ford in Europe and Ford in America are two quite different things. Or at least they were until now. For example in 1978 Ford attempted to import its European cars to America, but this endeavor has not met with success. American consumers did not appreciate cars with European character. Also, national differences in behavior have to be taken into account. For instance many urban dwellers are used to drinking their first cup of coffee in their cars. But while in Europe they drink espresso, in the USA they drink Americano, which means that cup holders also must be different. And this is only one of hundreds of small things. However much we like our cars, not many of us are willing to adapt their lifestyle to a new car. But time passes, we change, and European Fords – such as Fiesta – will come to American showrooms again. As to general preferences regarding cars, Americans usually put car dimensions over performance. On American roads you are not likely to see a car going over 100 kph, and 120 kph is quite rare. For Americans, risky, speedy driving is a foolish thing to do. Going into oncoming lane is absurd. I still fail to grasp the logic – to save time you need to go faster, to take risks. But you may lose your life instead of saving time…
А95:
As for my nation, I think Ukrainians often break traffic regulations mostly because if you strictly follow road markings and traffic signs, you probably will not get anywhere, at least within reasonable time.
Bohdan Kulchyckyj:
That is just my point - any culture starts with little things, which means that everyone must follow the rules, and then everyone will be comfortable. And if one, two persons decide that they would rather not… then you will have Kyiv roads during the rush hour. And it is not only a matter of comfort. If you do not fasten your seat belt, this does not make you look cool, it makes you stupid. In other words, a driver who does not use safety belts is a fool. In America, they also sometimes drive with seat belts unfastened, but they have to face a tidy fine for that. But it is not the fine that really matters. In the USA, even police officers on patrol drive with their seat belts on. And not because the Law requires it, but because it is foolish to drive and think that nothing will happen, it is foolish to risk your life so much, when it is not necessary. It is not for nothing that they say: if you want to understand how things stand in the country, watch how its people drive their cars. With all that being said, I am absolutely positive that human nature is basically the same everywhere. Essentially, we all want the same things, although different countries offer different opportunities for reaching your goals by honest means. In one country you can work honestly and hard and be well off. In another country it is not enough just to be honest and hard-working if you want to reach something - you just have to use some “tricks”, so to say. Now if we are talking about America, there are many examples when quite simple but talented people who started from nothing became famous, successful and wealthy. They just worked hard. From Martin Luther King to Obama.
А95:
Do you think such people can appear in Ukraine?
Bohdan Kulchyckyj:
I believe in people. I believe in human abilities in general. And you should believe in yourself, your own success, ideas, believe these ideas are true and good in spite of all. And I believe that such people live among us, including in Ukraine. It is another matter that a person of this type needs support, needs a team that stick to their ideas, needs followers. This is the way to establishing good practices, to making ideas strong. After the spirit is born it must grow firm and strong. And this takes time, sometimes quite a lot of time. Everyone wants things to happen quickly. It’s impossible. A number of national leaders must appear one by one in order to overcome negative tendencies imposed on society by its most aggressive and greediest part. Although the first two or three leaders are usually assassinated. That’s what happened to Kennedy and King in the USA.
А95: Let us return from political matters to the most pleasant part of car business, to car sales. Sell me a car.
Bohdan Kulchyckyj: ???
А95:
No, it is not “give me extra 100 bucks off the showroom price” – we want to show how a car seller's mind works using you as an example. It may help our readers to develop a sensible approach to their purchase by learning to separate their needs from a seller's wishes.
Bohdan Kulchyckyj:
You know I have never sold a car in my life, but let us try. Firstly, a salesperson needs to classify his/her customer, understand why this customer needs a car and how he/she is intends to use it. For example, if someone wants a car to prove to the world he/she is successful and rich, it would be silly for a salesperson to place emphasis on fuel-saving technologies. But let me demonstrate the car selling process using my family as an example. When my wife chooses a car, her first and foremost criterion is safety. She is just not interested in a car that failed to achieve the five star NCAP rating. And a good salesperson must understand that almost every customer has its individual criteria. So the salesperson’s task is to identify them and offer a car that covers as many customer needs as possible. It is also very important for buyers, because the right car is not just four wheels, engine and roof, but a certain lifestyle as well. And a well chosen car can make you life run more smoothly than ever before.
