The timing seemed almost too good to be true. Within days of Sergey Alexandrov, General Director of ITEMF Expo, announcing the return of Comtrans to Moscow’s Crocus Expo Centre in 2017, the Organisation for Economic Co-operation and Development (OECD) published a report saying the Russian economy was finally ready to rebound from the deepest recession in a decade.
After years of suffering from plummeting oil prices and international trade sanctions, the OECD’s optimistic assessment – albeit cautious – helped refute at least some of the scepticism that had surrounded the Russian truck market ever since the Russian military intervention in Ukraine in early 2014, which left the nation virtually cut off from the western world.
Even though the OECD report concluded that the Russian economy would remain “relatively closed” for the foreseeable future, saying fiscal tightening and low infrastructure investment might still jeopardise the recovery, it provided a timely boost to Alexandrov’s marketing campaign. With heavy vehicle sales now also on the rise, the 36-year-old is confident that both Russia and Comtrans are once again headed for a bright future.
Q: Russia’s commercial vehicle market has had to face intense pressure in recent years. Do you think the crisis is now coming to an end?
A: After the historic peak of new commercial vehicle sales in 2012, the market suffered a dramatic downfall – reaching its bottom line in 2015, the year of the last Comtrans event. But the economy is recovering gradually. Boosted partly by deferred demand from 2015, the commercial vehicle market has grown 40 per cent in the first half of 2017, compared to the same period in 2016 – so it’s safe to say we’re on the right track. Also don’t forget that there are more than eight million commercial vehicles registered in Russia, so there’s always a strong base market. Since 2009, that number has increased by over 13 percent, which equates to almost one million vehicles. So if you want to talk business potential, it’s safe to say Russia is a strong prospect.
Q: Does that also affect Comtrans?
A: Yes, the upward trend is also good for Comtrans. Compared to 2015, many companies have expanded their exhibition space for the next edition. The tendency is simple to explain, too – a market revival inevitably leads to increased competition, especially since a lot of foreign companies lost their market share to domestic producers in the last three years. The growth in exhibition space is testament to many manufacturers’ expectations that the market will continue to grow. What’s more, companies that missed the exhibition in 2015, like Volkswagen or DAF, are returning to Comtrans in 2017. The European ‘big seven’ will once again face off against the local Russian trucking elite.
Q: …once again making Comtrans a truly global event after Russia being more or less cut off the western world for a while?
A: Exactly. Comtrans will be the leading commercial vehicle show o 2017 – not only in Russia, but also in Europe. Traditionally companies from Turkey and Europe – especially Germany – have always been well represented, and that’ll be once again the case. More new exhibitors from Asia will also come on board, focusing not only on vehicles, but also on spare parts and solutions for the commercial vehicle aftermarket.
Q: Do you think the trend is here to stay?
A: Almost all analysts share positive forecasts for the next three years or so – most of that is based on fleet renewal and preparation for big sporting events like the 2018 FIFA World Cup. The consensus forecast is some 20 per cent growth for light commercial vehicles and 40 per cent growth for the heavy equipment market. I would not dare looking beyond 2020 at the moment, though, since so many factors – even in the medium term – are in flux.
Q: Speaking of unknown variables, how is the service sector developing in Russia following the crisis? Are issues like fleet management, telematics, service and maintenance contracts and driver training as high on the agenda as they are currently in the west?
A: Let’s say the local commercial vehicle market is in a transition phase. Service will be a major factor in the industry as demand and competition grow. Once all key manufacturers are competing in Russia, the focus will be on providing more complete solutions for all parties involved – be it drivers, fleet operators or end customers. We will definitely see more internet-driven solutions in that context, too, such as Uber-like aggregators for cargo transportation. Due to its geography alone I am sure Russia will be a great market for new and clever technologies.
Q: Can a truck show like Comtrans help facilitate that development? Which role does it play in the development of the sector at large?
A: Absolutely. We work very closely with industry and want to be a proactive force in driving innovation. That’s why we launched a flagship conference – the Moscow Commercial Vehicle Summit – to coincide with Comtrans 2017. I am sure it will become a recognised platform to exchange of ideas and develop new of strategies among key decision-makers and opinion leaders from both Russia and abroad.
Q: That’s a strong comeback after a tough 2015…
A: Indeed – 2015 was a low point for the local truck market, with sales up to 60 per cent below 2012. The 2017 concept was devised during that challenging period, and it’s fair to say that our close relationships with major local players like KAMAZ and GAZ Group enabled us to refocus and hopefully make the 2017 event a success. I would like to give special thanks to Association of European Businesses in Russia and its CEO, Dr Frank Schauff , for the valuable support during that time.
Q: There was some change behind the scenes as well. ITEMF Expo, a joint venture of Britain’s ITE Group and Germany’s Messe Frankfurt is now organizing the event. What did that mean for the Comtrans concept?
A: It’s a fact that Comtrans is already a well-established brand known not only in Russia, but also abroad. Therefore my colleagues and I tried to preserve that standing while still trying to bring something new to the table. As such, expanding the exhibition area is not an end in itself – customer satisfaction is equally important for the success of the show. That’s why we put more effort in technical support before and after the event, for example. The Summit is another example of how we tried to add value, and the same is true for our new collaboration with MIMS Automechanika Moscow, which allows us to provide customers with a deal to participate in both exhibitions. Last but not least, one of the key factors that contribute to the success of Comtrans is the ‘Russian Commercial Vehicle of the Year’ award show. We will further support that part of it, as there is nothing of its kind on the Russian market.
Q: If you think one step ahead, do you think trade shows in their current format might become out-dated at some stage down the track?
A: No. Exhibitions are still very important channels to market. Of course our world is changing and new technologies are introduced at an increasingly rapid rate – and that’s also true for the exhibition business. But as interactive technologies bring more and more communication from the real world into the virtual one, there will be a growing need for direct and immediate contact among people. In my view, there isn’t any advanced technology that can replace real-life communication between real people. Only at a truck show can you touch and feel products with your own two hands, put yourself in the drivers’ shoes, meet opinion leaders and seek new inspiration all in the same place. The ability to communicate directly, on the spot, is unique to trade events like Comtrans.
Sergey Alexandrov has been serving as General Manager at ITEMF Expo since 2015. Prior to his appointment, he worked as Executive Director at Messe Frankfurt’s Russian branch.
According to Comtrans data, there are currently 8.09 million commercial vehicles registered in Russia. Since 2009, that number has increased by over 13 per cent. More than 50 per cent of all commercial vehicles in Russia were manufactured before 2002, with 70 per cent being locally made.