We have imported cars and spares. The guarantees issued by the HSBC Bank Armenia allowed us import goods at lower tariffs. Bank guarantees are much more beneficial than taking loans.

Like in any other country, the auto business in Armenia was damaged by the crisis. The national currency devaluation resulted in steep decrease in salaries of the majority of the Armenian citizens. Thanks to correct forecasts, the company managed to conclude new agreements and reduce the annual plan. Presently, the cars are sold at extremely low prices, but putting up with lower incomes, Karkomavto counterbalanced the crisis.

We represent a dozen of car manufacturers, their share in sales volumes periodically changing, dependent on the demand. According to the 2010 first quarter data, trailers, pickups and trucks are most popular. During the past years, economy cars were sold best of all. The tendency continues this year as well.

According to our data, we cover 30% of the market. Currently, maintenance is the most popular service. In September 2009, Karkomavto opened Nissan and Renault maintenance centers, thus improving the quality of services offered in Armenia.

The problem was the uncoordinated Black Sea ferry schedule. We could not guarantee the delivery terms for the clients. After unblocking of the Upper Lars checkpoint, we will try to resume cargo transportation.

With the demand for cars used for commercial purposes increasing, Karkomavto will conclude mutually beneficial agreements with the manufacturers. Bogdan passenger cars will be in popular demand of companies engaged in network marketing. Besides, with the government paying more attention to agriculture development, the demand for farming machine will grow.

The credit interest rates are extremely high, due to unpredictable national currency rate, what is risky for banks. As to corporate credits, major companies are negotiating reduction of interest rates with the banks.

I do not think it will affect the auto business but the drivers will be more careful.

The customs clearance was simplified in a way. The importing company can itself fill in the declaration, what helps save time [earlier, the declaration was filled in by a customs officer]. The customs dues remain high, as Armenia forms the major part of its national budget with taxes paid at the border. They are lower than in Azerbaijan but much higher than in Georgia. In Turkey, these are almost the same.

We will keep up a moderate policy, as the crisis still persists, hampering development of the market. But we expect better results in August-September.