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Russia's Lada seeks to overcome negative image in Cuba.

One of the most enduring legacies of Cuba's long years of alignment with the Soviet bloc is the proliferation of Russian Ladas, Czech Skodas and Polish Fiat Polskis on the streets of Havana.

Older Cuban drivers, accustomed to the big American gas-guzzlers of the 1950s, have long despised the cramped, boxy Eastern European cars. But that's now changing thanks to the introduction of new, stylish, roomier autos.

The New York Times reported in mid-November that Izhavto, which manufactures the Lada, is under intense pressure to sell cars overseas, following production overruns that have boosted output from 27,400 units in 2000 to 94,200 in 2003.

To that end, Lada's dealership in Havana, Rusia Automotriz S.A. (RASA) is attempting the impossible: to successfully market its new line of cars to both Cubans and foreigners living on the island.

RASA hopes the new vehicles, comparable in design to Audi and Volvo, will spur sales, despite Lada's negative image and competition from new Japanese and Korean models that enjoy much better credibility among prospective car buyers.

Since July 2003, when it inaugurated its showroom at Havana's Galeria de Paseo shopping mall, RASA says it has sold over 2,000 cars in Cuba. These include the Lada 2110, which costs $11,231, the Lada 2112 ($10,730) and the Lada 2115 ($10,400). The Niva, an SUV-like vehicle, sells for only $7,557.

RASA, with local subsidiaries at the Miramar Trade Center, says that its Cuban clientele consists mainly of state entities like Auto-import, Tecnoimport, Emiat and Emed, along with the popular taxi company Panataxi, which uses the Lada 2107 in its fleet.

CubaNews attempted to reach Ibrahim Cabrera, RASA's sales executive, and Svetlana Musina, chief of RASA's public relations, though neither was available for comment.

Perhaps RASA's biggest competitor for business from state entities and individual buyers is the Tokmakjian Group Inc., a Toronto-based car distributor that has exported over 10,000 Hyundai and other vehicles to Cuba between 1999 and 2002.

That company's CEO, Cy Tokmakjian, has just signed a $16 million contract with Cuban government entity ITH for over 1,000 Hyundai and Suzuki cars and buses. The vehicles purchased by ITH will be used by tourism outfits Transtur and VeraCuba for private rentals, taxis, and tour buses.

Another potential RASA rival is Panama's Corporacion Automotriz Latinoamericana S.A. (CALSA), exclusive distributor of Toyota cars and Hino trucks. CALSA has a warehouse in Berroa, and sells Yokahama tires, Yuasa car batteries, and imported auto parts.

CALSA's current Cuban clientele includes Cubalse, tourism entities Transtur and Gaviota, and the holding company Cimex (which bought 600 Toyota cars from CALSA for its car rental division in late 2003).

Along with CALSA and the Tokmakjian Group, RASA also has competition from Finauto Internacional Ltd., an Italian company whose owner, Massimo Bonanno, ships a variety of vehicles into Cuba, including South Korea's Kia, India's Tata Motors and an assortment of jeeps, trucks, buses and mopeds made by Italy's Piaggio.

Finauto's Cuban clients include state entities SIME, Etecsa, Cubalse, Cimex, Transtur and rental agency Palco. Within the Cuban market, Finauto is also the exclusive supplier of Ravaglioli garage equipment from Italy.

Despite all that competition, Russia's Lada shouldn't be dismissed just yet, says a foreign entrepreneur working in Cuba.

"The main problem with foreign [non-Russian] cars is that they are very expensive, double in most cases. Parts are all imported, so the cost is through the roof, and the roads tend to destroy these new cars very quickly. I think the Russian cars make a great alternative for any company from a practical and economic point of view. They're cheap to buy and great on gas, which is very expensive."

The executive adds: "Ladas are very sturdy for the hard Cuban road conditions, and they seem to last a lot longer than other cars. Our company had bought Kia, Peugeot, Hyundai, Toyota and three Ticos [used Daewoo subcompact cars].

"The Ticos turned out to be the best value over time, especially when you consider everything--upfront cost, annual gas consumption, maintenance and repairs. We'll start replacing them next year, maybe with Ladas."

Details: Rusia Automotriz S.A., Centro de Negocios Miramar, Oficina 205, Edif. Santiago de Cuba, 5ta Avenida e/76 y 78, La Habana. Tel: +53 7 204-3552 or 204-3558. E-mail: rasa_habana@mtc.co.cu.
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Title Annotation:Rusia Automotriz S.A.
Author:Echevarria, Vito
Publication:CubaNews
Geographic Code:4EXRU
Date:Jan 1, 2005
Words:722
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