“AAA AUTO Group N.V. has decided to temporarily retreat from all foreign markets and focus on its main market of the Czech Republic and Slovakia during the time of the economic crisis. Also the new-car sales division was closed down at the end of 2008. Due to the difficult economic situation and the relative underperformance in the Group, the company decided to temporarily retreat from Hungary as at end-March 2009”, reads the press release.
The company signed a contract with a local partner SIXT New Kopel about a joint venture in Romania.AAA AUTO Group holds 5% in the Romanian company with an option to increase its stake up to 49%.
In 2008, AAA Auto recorded in Romania a turnover of 10.1 mln euros, down 50% from 20.2 million euros in 2007. The branch in Romania added 2.8% to the group’s turnover in 2008, in contrast with 4.3% contribution a year earlier.
The dealer sold 1,434 cars last year, 45.7% less compared to a year earlier, when it delivered some 2.641 cars. The Romanian branch geared 2% of the group’s total sales.
AAA Auto Romania’s headcount shrank 63% in 2008, down to 37 from 100 in 2007.
In June 2008, AAA Auto shut down its branch in Poland.
After the company’s decision to retreat from its foreign markets, the Group will have 30 branches in the Czech Republic (20) and Slovakia (10) as at the end of March 2009. At the end of 2008, AAA AUTO Group had 35 car centres in 4 countries down from 45 centres in 5 countries at end 2007.
The car stock has been lowered during the year by 44% yoy to 5,024 cars from 9,049 cars at end 2007.
The group’s headcount reduced by 62% in 2008, from 3,834 employees down to 1,440 employees.
AAA AUTO Group reported total revenues of 364.3 mil. euros on 60,557 cars sold in Romania, Poland, Hungary, Czech Republic, Slovakia in 2008 compared to 470.1 mil. euros on 79,871 cars sold a year earlier.
The losses reported by the group for 2008 amount to 27.9 mln euros, up 484.9%, compared to 4.78 million euro in 2007.
AAA Auto’s outlook for 2009
The company recorded growing sales in first quarter of the year and expects the market to recover soon. “In 2008, the strongest season which usually begins in March or April and lasts throughout the second quarter, did not arrive at all. It will be easier for us to return to profit when operating only on our main markets of the Czech Republic and Slovakia which have also been the most profitable ones,” Anthony James Denny, CEO of AAA AUTO Group, commented.
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