Used car market puts on the brakes

  • 1998-10-01
  • Parker Ruis
VILNIUS - Gariunai is the largest market in Lithuania. Customers regularly push their way through the massive crowd in search of specific items with cheap prices.

Across the street, the Gariunai used car lot is calm and lethargic. At the market where practically anything one desires can be found, car sellers are now struggling to come to terms with what they have lost: Russian buyers.

Before the ruble began taking more tumbles than a circus clown, Russians frequented the Gariunai car market with the hope of finding a quality car at a reasonable price.

Today, cars in the sandy lot can still be seen undergoing typical quality tests: tires are kicked, hoods are lifted. But sellers sedately explained that the business of buying cars in Western Europe and selling them in Lithuania is not what it used to be.

A middle-aged man from Marijampole named Juozas quietly sat in a Ford Sierra. He hoped to sell and passed the time by reading a newspaper. When asked how business was going, he did not hesitate to mention the Russian crisis' effect.

"I'm just trying to break even by selling this car," said Juozas. "I usually go to Germany to buy cars and then bring them back here to sell. Many of my customers were Russians who hoped to get a cheaper deal by buying in Lithuania. There are fewer of them around now."

With taxes to be paid on the borders, a 50 litas ($12.50) per weekend charge for a space in the Gariunai lot and the constant need to slash prices, Juozas said that earning a profit is getting more difficult by the day.

The reason? He responds quickly. The number of Russian buyers is decreasing.

In more prosperous times, Juozas said cars were regularly sold in no more than a week or two, usually at a $200 to $300 profit.

With the number of Russians now trickling into Gariunai, however, he said he felt lucky to have one sale a month.

"I've already been trying to sell this Ford for more than four weeks," said Juozas. "Many people end up selling the cars at the same price they bought them. Sometimes they sell them at a loss. The price I'm selling this car for has already dropped from well over $2,000 to $1,850."

A younger car salesman from Klaipeda named Marius offered some comments while shaking out the floorboard mats of the Opel he was trying to unload.

"I just started in this business, so I can't really compare to how it was, but I can say that Vilnius is still the best place to sell cars because of its size," Marius said. "In my first weekend here I already sold one car to some customers from Armenia or someplace."

In Klaipeda, he says things are much tougher. "Because I spent two weeks there without a sale, I'm hoping to just break even this time. Who knows when this Opel will be bought."

But, as ever in the world of market economies, what's bad for the seller isn't necessarily bad for the buyer. Unlike in Russia, Lithuania has yet to suffer any large influxes in its currency, which means good used cars are available at prices cheaper than ever.

One young woman named Alma, busy scrutinizing the rows of cars on the lot, said she has been wanting new wheels for a long time. Upon hearing about falling prices, she headed straight to Gariunai to take a look.

"Will I buy a car? I doubt that I'll do it today," she said. "But it never hurts to look."