The entire machinery market is being taken over by Chinese companies
In 2020, Asian equipment held a 22% market share in Russia, which had increased to 82% by 2023.
Local Russian manufacturers are gradually losing market share. They once believed that foreign companies had exited the market, leaving no competition for local manufacturers. However, statistics show that imports are growing at double or even triple-digit rates. For example, the import volume of trailers has grown by 108%. This is a challenging situation.
In the bulldozer sector, Russian domestic machines hold an estimated 26.4% market share, while Chinese machines hold 70.6%. In the loader sector, Russian products only account for 5.2%, with Chinese products at 89%.
The situation with engineering machinery components is not much better.
Previously, 100% of Russia’s domestic hydraulic transmissions were supplied by Germany and Ukraine, but now 99% come from China. Pumps and hydraulic motors are 100% sourced from the Czech Republic and Western countries. Half are now purchased in Russia, and half are purchased in Turkey.
The strong support from the Chinese government for Chinese importers makes localizing component production in Russia meaningless, as the cost of producing the same transmission for local companies is several times higher than that of Chinese companies.
The Russian Machinery Manufacturers Association conducted an analysis, showing that Russian component prices are 160% to 198% higher than those in China. The difference in raw material costs ranges from 353% to 459%. The total cost of producing a gear (5.95 kg) in Russia is $83.9, while in China it is $49.3. There are many reasons for this cost difference. China has cheap raw materials, lower taxes, larger production scales, cheaper loans, logistics, more advanced infrastructure, and technology. Additionally, Russia lacks complex technology and equipment, as well as qualified personnel.
