What’s up with DW Hower? Why “people dissolved”, and “dealers until the last kept in the dark”?
The other day we wrote about the situation with the DerVays plant in Cherkessk, which has not yet renewed the contracts for assembling Lifan and Chery cars for 2019, and now let’s try to figure out what is happening in Mikhailovsk at the Stavropol-Avto assembly plant. Is there a connection between these enterprises? Yes there is. In order to reveal it in detail, we need a separate large material, the place of which is, rather, on the pages of the business press. In this case, we have somewhat different tasks, so we simply note that there is a connection at the level of the founders, at the level of top management, at the level of kinship of people who at various times had a relation to both DerVais and Stavropol-Auto. . Such a connection is also traced through third companies. The China Automarket holds a special place in this chain.
In 2016, China Automarket, where some of the employees of IRITO (a major official distributor of the Chinese company Great Wall from 2005 to 2013) transferred, introduced the DW Hower brand to the Russian market. Soon, under this brand, H3 and H5 cars were introduced in dealers’ salons – these are the once popular Hover H3 and Hover H5 SUVs of the same Great Wall. With the restarting of models in Russia, “China Automarket” replaced the letter “v” in the title with “w” just to avoid disputes with IRITO, for which the rights were preserved.
In OTTS (vehicle type approval) on Hower H3 and Hower H5, issued by Rosstandart, China Automarket is listed as the applicant with its headquarters on 15 Shosseynaya Street in Cherkessk. The manufacturer indicated the DerVeys Automotive Company (Cherkessk, Podgornaya St., 134B), and the manufacturer’s representative again the China Automarket. In the column “Assembly plants and their addresses” are two companies. One, as you might guess, is located at: Cherkessk, ul. Podgornaya, 134B, the second – in Mikhailovsk (Vokzalnaya st., 103). At this second site last year they opened the assembly H3 and H5. According to Kommersant, as of the first decade of December last year, only a test batch of 530 cars was manufactured. Meanwhile, according to Rossiyskaya Gazeta, in 2017, 730 cars were already registered. According to several of our sources, among which are the former employees of China Automarket, in total from December 2017 as of early November of this year, about 2,400 cars were assembled – it was for such a batch of kits that a contract was signed with the Chinese side. Some of our interlocutors assure that this volume has not yet been finalized, but more on that below.
So, the assembly of Hower H3 and Hower H5 started last year, the distribution was made through the dealer network, which at one time served IRITO. Sellers quickly agreed to cooperate with the new company, after all, the machines were well known to them, and they diverged at one time like hot cakes. The China Automarket site still has a few dozen dealers noted, however, as we found out, many of them no longer sell DW Hover, but are engaged only in service, some telephone numbers do not answer at all.
Not everyone has “live” cars. Some dealers are ready to bring an SUV to order for prepaid and delivery up to 1.5 months. Some offer to drive on the specified day, when it comes to someone already ordered a copy. Astrakhan dealer promised delivery in just 3-4 days – close to the factory. There were, however, those (for example, in Moscow) who have a supply of “Hovers” in the warehouse in quantities of up to several pieces, moreover with an already TCP. Are dealers aware of the termination of Hower assembly at the Stavropol-Avto plant? The following answers turned out to be the most popular for this question: “the assembly is underway, but not in the volumes that were before” and “there are still machines in stock”.
So, from the end of last year, cars started to come to dealers regularly – but what happened, why did the business get up? On the one hand, the former employees of China Automarket claim that the company simply lacked working capital. One of the sources claims that presentations were held for potential investors until the end of October. On the other hand, the price of 1.2-1.4 million rubles for the Chinese obsolete Hower – and this is almost two times more than in the times of IRITO – our consumer no longer considers fair, therefore the low speed with which Hower copies were sold, clearly conflicted with the business model. There are other nuances. According to our sources, at the time the assembly began in Mikhailovsk, the plant was not commissioned at all and did not pass the appropriate expertise of Rostechnadzor. Finally, contrary to promises, China Automarket could not attract other Chinese manufacturers, expand its dealer network and create regional warehouses.
