St. Petersburg learns a new culture of vehicle inspection
St. Petersburg learns a new culture of vehicle inspection
26/02/2003
Finnish Vehicle Inspection Ltd is rapidly expanding its operations in the Baltic area.
Finnish Vehicle Inspection Ltd is rapidly expanding its operations in the Baltic area. Its latest conquest is St. Petersburg, Russia. Finnfund is one of the financiers of the vehicle inspection stations being set up there.
“In May 2002 we formed a joint enterprise, Rosavtokontrol,” says Finnish Vehicle Inspection’s deputy managing director, Pekka Pakarinen. “The rest of the year went in getting established – setting up an office and seeking good locations for our operations. At the start of December we signed our first rental contract for a business lot and within a year we are due to open three or four inspection stations.”
Finnish Vehicle Inspection (Suomen Autokatsastus in Finnish) and Finnfund together own 90 percent of Rosavtokontrol. The other partner is Russia’s ILEK Ltd. with 10 percent.
Excellent market prospects
Pakarinen points out that a presence in St. Petersburg is an important part of the parent company’s strategy for growth and internationalization. Finnish Vehicle Inspection has set up stations in Latvia and Poland in the past few years and has been studying the Russian market for several years.
“The idea matured gradually. We intend to keep to strict schedule in St. Petersburg. The city has special status in Russia and vehicle inspection is part of the state administrative reform programme. The government intends to use St. Petersburg as the test bed for things like the vehicle inspection system, before they are adopted elsewhere in the country.
In St. Petersburg alone, market prospects are excellent. It is a city of over a million vehicles yet the number of firms providing vehicle inspection is currently only 23.
“There’s no real question of competition,” Pakarinen notes. “Even if the inspection stations were open around the clock, it would be quite impossible to test all the cars. Time will tell how the market shapes up. Finnish Vehicle Inspection is building a chain and is aiming to be market leader in St. Petersburg.”
No foreign rivals so far
There are no foreign companies apart from the Finns in the St. Petersburg market for vehicle inspection. Their Russian competitors are fairly small, individual enterprises. The level of inspection stations is very mixed.
“Some places have modern, effective equipment but there are some stations that shouldn’t be in the business at all,” Pakarinen says.
Changing the attitudes of drivers is an important part of vehicle inspection operations. Pakarinen reckons it will take years before regular inspections come to be regarded as an aspect of motoring that improves safety.
“The old attitude is that inspecting vehicles isn’t very worthwhile,” he comments. “We aim to apply what we’ve learned in 80 years in Finland to Russian conditions. We believe that attitudes in St. Petersburg will respond to a new kind of vehicle inspection, carried out under modern conditions.
Under official eyes
Russia’s parliament, the Duma, permitted competition in vehicle inspection in 1996 but, although there are some private inspection stations, officials still play a key role. There is a member of the militia at every inspection station, who stamps the vehicle’s registration certificate if it is approved and checks the national vehicle register to see whether it has been reported stolen.
“The vehicle inspector acts as a technical consultant,” Pakarinen explains. “He determines the physical condition of the vehicle and recommends whether it should be approved to not.”
Russian law demands regular vehicle inspections, every second year for vehicles less then five years old, and then annually. Vehicle inspection stations must have qualified staff and technical testing equipment and they must be independent of vehicle repair operations.
A licence is required to offer vehicle inspection. The points to be inspected and how they should be evaluated are also laid down in law.
“But in practice, there’s still quite a lot of room for developing how these criteria are applied and observed,” Pakarinen believes.
Finnfund’s role as a financier is significant, he says.
“Banks can provide money for investment if necessary, but a significant part of the complete package provided by Finnfund was knowledge of the Russian market. Its solid professionalism was of great assistance.”
For more information please contact Ms Helena Korhonen tel. +358 9 3484 3307, email firstname.lastname@finnfund.fi
