AAA AUTO sells over 22,500 cars this year - growth will support domestic and international expansion

First new dealership in the Czech Republic in three years to open in Mladá Boleslav, offering 200 cars

Prague, April 25th 2017 – The largest used car dealer in the Czech Republic has already sold over 22,000 cars this year, and is on target to sell almost 80,000 cars across four countries in 2017. The sales growth will support the opening of new dealerships in Poland, while the network in the Czech Republic will expand for the first time in several years with the opening of a new dealership in Mladá Boleslav. According to AAA AUTO, the main problem in terms of the market situation is odometer fraud, which has become a mass phenomenon in Germany. Unfortunately, Germany is still where most cars are imported from.

“AAA AUTO group’s international sales increased by 10% in the first quarter, when the group sold 17,715 cars in total. In the first three weeks of April, sales passed the twenty-two thousand mark. March was our best monthly figure since October 2007, with almost seven thousand cars sold. In the Czech Republic, March was the best month since the economic crisis, with 4,314 cars sold, while international growth stood at 11.7%. The present results have led us to make an optimistic forecast of a total of 77,000 car sales this year by the AAA AUTO group. This brings us closer to the absolute record of 80,000 cars sold in 2007, the last year before the crisis,” said the CEO of AAA AUTO, Karolína Topolová.

In the first quarter, the number one used car sold in the AAA AUTO network in the Czech Republic was the Škoda Octavia, followed by the Škoda Fabia and then the VW Passat. The table below shows the popularity of the used cars sold in the various countries with AAA AUTO dealerships:

Dealership network expansion and further growth

The company’s sales growth will support the opening of up to four dealerships in Poland as well as the first new dealership in the Czech Republic in three years. “After careful analysis, we decided to open a new dealership in Mladá Boleslav, which is without doubt the motor city of the Czech Republic. The 4,300 square meter dealership with twenty employees and 200 cars for sale is located in an attractive location in the industrial zone of Kosmonosy near the Škoda Auto plant. The high population density represents potentially enormous buying power,” stated Karolína Topolová. The dealership will have its trial opening on April 26th and will officially open for business on May 10th. It will be the twenty-second dealership in the Czech Republic, where AAA AUTO has a presence in at least one town in each region. Further development is also expected at Mototechna, whose luxury car offshoot Mototechna Premium is currently celebrating its third anniversary.

Group marketing activities

AAA AUTO attributes its sales growth to the improved quality of its services and the larger stock of cars on offer, as well as the positive economic situation in the Czech Republic and neighbouring countries. The collaboration with Czech and Slovak football plays an important role in increasing awareness of the brand. AAA AUTO has been an official partner, through Mototechna, of the ePojištění.cz Czech football league and the Slovak football league since last September. “In the Czech Republic, clubs and officials have rented 105 personal and utility vehicles, with a total value of over CZK 70 million. Roughly 210 cars (nineteen models and nine brands) have ’gone through’ the leagues. The rented cars are an important source of nearly new cars for Mototechna and Mototechna Premium. In the CR, we gradually broadened the collaboration beyond the original agreement to special rentals, such as a BMW X6 car for Václav Kadlec and also a larger number of cars for SK Slavia Praha,” explained Karolína Topolová.

The market situation and changes to the law on used cars

According to AAA AUTO, odometer fraud continues to be a long-term problem for the used car market. Recent analysis by the German ADAC automobile club revealed that this practice is rampant in neighbouring Germany, where odometer fraud has been defined as a crime for the past ten years. “The ideal solution appears to be the creation of a national mileage database, which could in the future be quickly connected to similar systems in other EU countries. In order for this to happen, the government will have to be won over, along with the entities that will have to collect the data, which means manufacturers, authorized service centres, insurance companies, credit and leasing companies and the many other companies and institutions that hold this data. The ideal approach would be to pass a law making it mandatory for these different entities to share their mileage data. A potentially useful amendment to Law No 56/2001 is under preparation and could be in force by the second half of next year. The model could be the Belgian organization Car Pass, which processes information from around 8,000 sources,” said Karolína Topolová.

AAA AUTO drew attention to new changes in the law that will impact used car owners wanting to sell their cars or people wanting to purchase a used car after June 1st. “On June 1st, the amendment to Law No 56/2001 will allow a car to be transferred at any registration office in the Czech Republic. It will no longer be necessary to travel to the registration office in the municipality where the owner lives or to the place where the original owner lives. This will simplify the paperwork, which is something we welcome,” said AAA AUTO International CEO Petr Vaněček. According to him, the possibility of the seller finalizing registration without the involvement of the buyer is a positive change. “Up to now, there was no way to get the new owner to finalize registration. Cars often remained registered to their original owner, who then had to deal with traffic tickets or problems with unpaid car insurance. Now it will be possible for the registration office to demand that the new owner complete registration based on the seller’s notification. If the new owner fails to do so, the registration office will issue a new registration and the old registration will no longer be valid. After June 1st, every buyer will have to register their car or risk having serious problems,” he added.

But the law also includes another provision that used car dealers are unsure how to interpret. “In paragraph 48 there is a new provision on the invalidation of inspection reports where the value on the odometer mileage decreases after inspection. According to the new amendment, inspection reports will be valid for 30 days. It’s not yet clear who could discover, or how it might be discovered, that a car has been clocked after the issuing of the report required for registration of the vehicle to its new owner. We don’t know what this measure is supposed to be for – perhaps to deter original owners from tampering with the odometer, as that would make the car unsellable since it would fail the sales inspection. We will have to wait until the individual inspection technicians have had some experience with it after June 1st to assess its impact on the market,” stated Petr Vaněček.

For dealerships such as AAA AUTO that buy cars and become their owners, the measure is a positive one. “We inspect the car when we purchase it and the second inspection usually occurs quite quickly after it’s sold – providing conclusive proof that the seller has not manipulated the kilometres in the registration document,” concluded Petr Vaněček.