Ferronordic is an authorised dealer of Volvo CE, Terex, Dressta, Mecalac and Rottne in Russia and for Volvo CE and Mecalac in Kazakhstan. In parts of Russia, Ferronordic is an appointed aftermarket partner for Volvo and Renault Trucks and dealer for Volvo Penta. As of 2020, Ferronordic is also the authorised dealer for Volvo and Renault Trucks in parts of Germany. The company aims to be the leading service and sales company in its markets. It is currently the only dealer in Russia, and one of few in Europe, allowing it to offer the ‘Certified Rebuild’ warranty extension on Volvo equipment following repairs and service. The company, founded in 2010, has ~100 outlets and 1,500 employees currently.
The underlying market for western, high-quality CE in Russia/CIS could offer high double-digit growth for several years to come due to general economic recovery, pent-up demand for at least 60,000 units and a change in purchasing behaviour from a focus on initial price to total cost of ownership. Improved operations and market share gains in Germany could generate profit. As a certified Volvo CE distributor, Ferronordic’s ability to gain market share would imply high sales potential.
Russia has historically been notorious for low transparency, poor corporate governance and corruption. Sanctions have also proven to have a significant impact on the Russian economy, which in turn could hamper the recovering market for CE. Approximately 80% of Ferronordic’s sold units are Volvo, which implies a high reliance on that relationship.