Hezi Shayb, CEO of New Kopel Group, tells BR in an exclusive interview that the company is aiming to invest in buildings that have long term tenants in Bucharest, this being a new sector for the firm that provides operational leasing services and sells second hand cars.
What are New Kopel’s expansion plans in the local real estate market? What are the firm’s current operations in this field?
Now we are examining projects in real estate activity in Romania and I believe 2016 will be the year that our activity will start in this field. The local real estate market will see an increase in the following years. We will not assist to a boom we saw in 2005 – 2007, but it will be a healthy grow that will attract investments in Romania. Romania became more stable country from political, financial and economic perspective and all this will attract a lot of investments. We are now in process of checking and analyzing all possibilities. What is clear to us, is that we will start with simple projects and in the future we will progress to more complicated ones. So, at the beginning we will search to invest in buildings that have long term tenants. As location, we are focusing now on Bucharest, but we are not blocking any other possibility.
We are not in a hurry, everything what we are doing is for long term, especially when we are speaking about real estate.
How much do you plan to invest in the acquisition of new cars this year?
We increased the fleet buying 1001 cars in 2014 and 1055 new cars in 2015. For 2016 we are going to buy between 1200 –1500 new cars, increase the fleet in operational leasing and to reach 750 in rent a car business unit.
In the same time our target for this year is to sell up to 1500 new and second cars in 2016. We are focusing on the local market, retail customer and we are trying to establish long term relationship by giving the longest warranty period in the second hand market.
Why did you decide to expand in the fleet management segment? What kind of industries are you targeting with this new service?
There are a lot of companies that due to several reasons took the decision to have financial leasing or to own the cars. Still these companies needs someone that will manage their fleet activity, someone that will take care of their cars, maintain them, and give replacement while the car is in service and they want to know the cost in advance. Also is easier for companies from operational point of view, because all costs are centralized and followed.
To make the long story short, we can offer today to companies that already own their cars the same service that they received from operational leasing companies, with a very competitive price.
How would you describe the second-hand car market in Romania?
The second hand market in Romania is 4 or 5 times bigger comparing to the new cars market. There is a huge advantage in buying a second hand car, but there are some things that a customer needs to be aware of:
- Warranty should be as long as it can be
- Unfortunately not all the cars that are offered in the market are having real millage. The buyer should be very careful and to look at the car history, to make sure that what is buying is the same with what he thinks is buying
- Usually when you buy a second hand car, you need to replace it after a few years. The option to do buy back after few years is very important.
What are New Kopel’s targets in terms of profits and turnover for 2016? What is the total amount you are looking to invest in Romania this year?
We believe that we have to be very competitive in the market, very flexible and to give the best service to our customers, but also we believe that in order to do it, a company should be positive and to gain profitability. For sure we are planning to generate profit in 2016.
To speak in numbers, in 2016, we are planning to buy between 1200 and 1500 new cars in our fleet, to increase our activity in the workshop with 20%, to register an increase of 9% in rent a car and to sell up to 1500 new and second hand cars.