SNAPSHOT:
The company: Avto Union is part of the Equest Investment Balkans fund listed on the London Stock Exchange. It is a holding company managing the importers of seven motor vehicle and three scooter brands. Among these are Fiat, Lancia, Alfa Romeo, Maserati, Opel, Chevrolet and Mazda, and Piaggio, Vespa and Gilera motorbikes.
The manager: Kalina Halatcheva
The job: Chief operational officer
In brief: Halatcheva joined Equest in 2004 when she returned from Switzerland. Before that she worked in the finance department of Starwood Hotels in Italy and in the business bonsulting department of IBM Schweiz in Zurich. Halatcheva holds a bachelors degree in business administration from Fachhochshule Furtwangen in Germany and a bachelors degree in public speaking from the National Academy of Film and Theatre Arts in Bulgaria. She also studied business administration at the University of Zurich and is currently studying for a masters degrees at the London Business School and Columbia University.
When Kalina Halatcheva decided to give up on her Swiss dream and return to Bulgaria in 2004, she had every reason to hope for the best.
In Zurich I was working for the business consulting department of IBM Schweiz. This was like a dream come true for me. I soon realised, however, that I needed something new and challenging. In 2004 I had two reasons to return to Bulgaria. One was personal. The other was that I could see that things were starting to change around here.
Hence she joined Equest Investment Balkans. It was a risk but I felt I was part of something new and ambitious. As such I knew I was going to get my chance, It came in the form of her new role as chief operational officer of Equests Avto Union, which manages the importers of seven motor vehicle and three brands of scooter.
Four years later, Avto Union has proven itself to be one of the fastest growing companies in Bulgaria.
Avto Union registered 67 per cent growth in the first quarter of 2008. In the meantime it has also managed to complete a number of projects worth millions of euro.
In April, Avto Union opened two new showrooms belonging to one of its companies, Bulvaria, that imports Opel and Chevrolet.
On May 15 came the moment for Avto Union to take care of its other major importers Avto Italia (Fiat and Lancia), Milano Motor (Alfa Romeo) and Gransport Auto (Maserati).
The new home of the three brands in Bulgaria is one of the most expensive investments made in Bulgaria this year, worth 43 million euro. Halatcheva is one of the faces behind the opening of Avto Union Center the largest motor vehicle exhibition and maintenance centre in South East Europe.
Moments after the centre was unveiled, Halatcheva granted The Sofia Echo her first interview to Bulgarian media.
For us, the centres opening means one thing: advantage, she says.
The main idea is obvious: to have luxury showrooms and premises. Weve also asked ourselves what we can offer our clients to give us an edge over competitors. More and more brands are entering the market every day and competition is extremely strong. On the other hand, clients have become more demanding. All these factors give us the opportunity to find our niche.
Halatcheva believes this niche was about providing the client with a brand experience unobtainable elsewhere. Halatcheva and her colleagues did their homework well by conducting several surveys among clients on what they wanted from their purchase of a vehicle.
Were extremely lucky because our brands have an additional prestige that we can exploit in the best possible way. The value comes from the brands home country. When you think of Fiat, Lancia, Alfa Romeo and Maserati you inevitably think of Italy. This is an image that can always surprise you. This is also what we decided to use in our new centre.
This led to a decision to make Avto Union Center a place where we can provide brand experience to our clients, not just sell them a motor vehicle. Besides the large maintenance area, the centre has restaurants, coffee shops and every possible model of the Italian brands offered by Avto Union.
Seizing on a countrys popular image seems to have paid off. Currently, Halatcheva has a waiting list of people wanting to buy the legendary Fiat 500. Weve never had so many requests for our other brands, she says.
So what do Bulgarians like to drive?
Of course, clients show great interest in some of the more modestly priced vehicles but weve noticed that clients can be separated into two groups: those who opt for German brands and those who want Italian or Japanese brands that can offer them something different from your standard motor vehicle.
Another trend is also very important to her. Bulgarians can now afford to change their motor vehicles more frequently than they used to five years ago. Bulgarian clients are more willing to try new brands and models outside the low-class segment. This is what has made Alfa Romeo such a rapidly growing success story in Bulgaria. Alfa Romeos buyers are people who can afford to be different.
When Halatcheva announced the news about the centre a month ago, she said that Avto Union would invest 43 million euro in it. This has made the centre one of the largest investments in the country this year.
When asked about the business side of the centre Halatcheva quickly shifts from addressing the Italian spirit of the brands and the Ikea-designed showroom to the serious side of the enterprise.
After all, its not every day a company decides to invest 43 million euro in Bulgaria, especially when the countrys reputation within the European Union is in shreds and some media reports even suggest that its EU membership could be frozen.
Indeed, the sum is quite large but I can assure you that we have made our calculations well and we expect a quick return on our investment, she says.
Halatcheva also shared some of the companys plans, saying: Avto Union is a holding company managing the importers of seven motor vehicle and three scooter brands. All the companies that will sell their brands here will be renting premises from Avto Union. We have a number of other companies that have also started renting premises at the centre, so we are looking at a good start.
Halatcheva claims this will allow the teams of Avto Italia and Milano Motors to focus on developing their brands in the country. We want all of their staff to concentrate on their work as much as possible. We hope to have achieved this with the centre. Avto Union directs all its other investment projects, such as the opening of a centre dedicated entirely to Mazda motor vehicles. Hence, Halatcheva can concentrate on the brands long-term strategy and the companys investment policy. Of course, this happens with the help of all the managers, not just me, she says.
Halatcheva repeatedly stresses the importance of maintaining stable growth. This is why the next item on her agenda is the new exhibition centre of Star Motors, the importer of Mazda.
This summer we expect to have the groundbreaking ceremony for a brand new Mazda centre in Sofia. Weve been planning it for two years but were starting it now because we won the right to turn the centre into a venue where we will train all the other dealers in South East Europe.
Avto Unions website has a section providing details on where one can buy a Maserati.
Maserati falls into the niche of the boutique brands that are produced in limited numbers. We applied to represent Maserati in Bulgaria about four years ago and it took us almost three years to be approved, Halatcheva says.
So is there a market for such an expensive and boutique motor vehicle in Bulgaria?
We had to answer this question at the time and it wasnt easy. Today, I can say that the market for Maserati in Bulgaria exceeds our hopes. It pleasantly surprised us, although I must admit we were rather conservative in our expectations back then. What makes Bulgaria unique is that we have quite a large number of women driving Maserati. Even our first customer was a woman.
Maserati is Halatchevas choice as well. I have driven all of our brands. Until recently I was driving an Alfa Romeo but finally I got the chance to drive a Maserati. This has made my colleagues very happy because its been really popular as a company car, she says.
Market position
Halatcheva says Avto Union occupies the fifth position in the market. "In 2007 we sold about 3500 cars so I think it is a serious basis for further growth. However, because we are part of a fund listed on the London Stock Exchange, I dont want to give a prognosis that could mislead our investors, she says, again underlining the importance of reliability.
"Our ambition it to move forward, not by becoming the top-selling company, but by being the most profitable one on the market. This is what really matters to our investors and we want to achieve this in a stable way. We dont want to have a boom this year and then nothing. As a listed company, we simply need to have growth every year. We cant afford to have growth of 67 per cent, as it has been for the first quarter of the year, and then lose it. That would be a negative sign. She does say, however, that Bulgaria, Romania and Serbia have more potential for further growth than the overcrowded market of Western Europe. "Thats why all major producers are concentrating on this region. We have frequent visits from their representatives and they are definitely showing strong interest.
Sale stats
According to data from the Union of Car Importers in Bulgaria, in the first four months of 2008, sales of new vehicles rose by 27.42 per cent on the year to 20 119 units. In January-April, car sales rose by 24.3 per cent to 18 687 units. Opel led the rankings with 2285 units. Toyota came second with 1961 cars, followed by Ford and Volkswagen with sales of 1670 and 1571 new cars, respectively.
