Sales of special equipment in Russia in 2022 fell for the first time in six years

Sales of road construction equipment (DST) and special equipment in 2022 in quantitative terms decreased by a third compared to 2021. This was announced on February 14 by the Association of European Businesses (AEB).

AEB sales data includes importers and Russian manufacturers (eg Kranex, PTZ, Chetra), which collectively account for approximately 80% of the Russian DST and special equipment market.

In total, 13,677 units of equipment included in the AEB calculations were sold last year, while in 2021 sales amounted to 20,508 units. All types of equipment sank, except for wheeled excavators, the sale of which increased by 9% to 1,039 vehicles.

Sales of new backhoe loaders fell the most, according to the AEB (-65%, 1907 vehicles). Sales of articulated dump trucks decreased by 55% to 145 units, skid steer loaders and telehandlers – by 53% for each type of equipment, single and double drum vibratory rollers – by 35% and 26%, respectively. The drawdown also occurred in tracked excavators (-16%), wheel loaders (-22%), tracked tractors (-23%) and other equipment.

The decrease in the market for DST and special equipment in Russia occurred, according to the AEB, for the first time since 2016. Then the reasons for the decline were associated with the introduction of a recycling fee, expensive loans and the devaluation of the ruble, the association explained in 2017. The decrease in 2016 was only 7% compared to the previous year. Then in this segment there was a sharp increase in sales – immediately by 49% in 2017 and by 31% – in 2018. At the end of 2019, they increased by 12%, in 2020 – by 0.3% and in 2021. – by 47%.

A representative of Kranex explained to Vedomosti that the drop in sales in 2022 was primarily due to the forced change of component suppliers amid sanctions. “But we, like many other companies, have already found new suppliers,” he added. According to him, about 80% of enterprises have already reoriented to Asian component manufacturers. “Parallel import [оригинальных деталей] turned out to be too expensive, ”said the interlocutor. He clarifies that the drop in sales is a temporary phenomenon, but fears competition from Chinese DST producers, some of which “set dumping prices.”

Earlier, the Spetsavtoprom association (which unites Russian factories in the industry) asked the government to allocate additional funds in 2023 for a program of preferential leasing of special equipment in order to support domestic enterprises, including against the backdrop of the dumping of Chinese suppliers (Vedomosti wrote about this on January 24). Another industry association Rosspetsmash also drew attention to this problem (see the issue of October 20, 2022).

At the same time, Rosspetsmash estimated the growth in the production of Russian DST in 2022 in monetary terms at 35% compared to 2021. According to the association’s calculations, it amounted to 75.6 billion rubles. (“Vedomosti” wrote about this on January 20, 2023).

Spetsavtoprom CEO Denis Kudryavtsev attributes the fall in sales in 2022 to the increase in leasing and loan rates after the start of the SVO in Ukraine. “The market has also significantly declined against the backdrop of European DST producers leaving the Russian Federation,” adds Kudryavtsev. According to him, the reorientation to Chinese manufacturers of equipment and components “took time.”

According to Kudryavtsev, it is Chinese equipment that will replace the European equipment that left the Russian Federation in the coming years, and it is due to it that the growth of the special equipment market will be ensured. Earlier, he complained to Vedomosti that Avtodor-leasing received subsidies of 120 billion rubles. for the purchase of 6676 units of imported DST, including road rollers, bulldozers, excavators, loaders, cranes and dump trucks.

According to SBS Consulting project manager Dmitry Babansky, the main reasons for the decline in DST sales are price increases in 2022 and the departure of key suppliers. “For example, in 2021, the largest sellers of backhoe loaders were the British JCB, which provided about 40% of imports, the American Caterpillar (about 17%) and Case (10%). But they left the Russian market,” the expert noted.

Babansky expects stabilization and “some growth” in the DST and special equipment market, since “the construction industry is actively supported by the state, and projects in the mining sector are being reoriented to alternative suppliers.”