Russian and Ukrainian Markets of Harvesting Combines
The two largest markets of CIS countries and of Eastern Europe, two ways of development – big prospects:
Russian market is subordinated to domestic manufacturers’ interests of harvesting combines, which sell their own production, at the expense of import restriction for competitive brands, at prices approximated to prices of modern models produced in the EU or in the USA. This situation limits possibilities of domestic agricultural producers and does not promote creation of innovative manufactures of Hi-Tech agricultural machinery.
Ukrainian market of harvesting combines is subordinated to domestic agricultural producers’ interests, who choose partners by themselves. Such situation makes conditions of tough competition between leading world brands, influences on competitiveness increase of domestic agricultural production at world markets, favours the creation of assembly and new Hi-Tech innovative manufactures of agricultural machinery.
Russian Market of Harvesting Combines
During 9 months of 2013
On results of 9 months of 2013 in comparison with data of the same period of 2012, despite the import restriction, imposed on association’s “Rosagromash” initiative in December of 2012, market of harvesting combines presented surprise results:
· 100% import increase of harvesting combines by EU and USA production, at that import is only 19.1% of pre-crisis level, when in 2008 there were imported 2803 combines;
· 300% import increase of harvesting combines from the Republic of Belarus;
· fall in production of EU and USA brands by Russian assembly for more than 33%;
· fall in production of the RB’s brands by Russian assembly for more than 21.1%;
· the market become more predicted for investments.
In fact, domestic manufacturers of harvesting combines increased production volume at the expense of production volume reduction of western brands Hi-Tech models at Russian territory. Such tendency is noticeable in reports given by ASM-Holding (Moscow).
On the mind of many market participants, the measures, that were introduced on “Rosagromash” initiative, do not correspond to market’s laws, that in result led to response of other market participants, which was dictated by economic reasonability and by pragmatic approach.
Antidote for introduced restraints was a reaction of Kazakhstan, whose market size of harvesting combines is only approximately 300 pieces. People in the government of Kazakhstan consider that farmers will buy harvesting combines by EU and USA production: Claas, John Deree, New Holland, Case, because manufacturing technology dictates that choice, and duty imposing forces farmers to pay higher price, what in result influences negatively at cost price and competitiveness of Kazakh grain.
On July 5, 2013 Kazakhstan took advantage of right “veto”, because it considered that its interests had been infringed, and 16/10/13 EEC changed measure and distributed import quote of harvesting combines during 2014-2016 years. Therefore, during the period from 05/07/13 till 16/10/13 importers of harvesting combines of leading world brands Claas, John Deree, New Holland, Case could freely import their combines to the CU’s territory. By results of 9 months of 2013 import volume of harvesting combines of EU’s and USA’s production to Russia exceed in two times the figures of the same period of 2012.
Once again this points out the reasonability of making relations with leading world manufacturers on bases of market relations, which gives opportunity:
· to create transparent and predictable conditions for long-term investments of western companies;
· to use their experience for modernization of domestic agricultural machinery manufacturing;
· to create partner relations between participants of agricultural machinery market of CU and CIS countries;
· to increase volume of export deliveries to CIS’ and Eastern Europe countries at the expanse of modern combines deliveries of famous world brands, which are produced in Russia.
For today at export markets there is reduction tendency of the part of harvesting combines market, which are produced in CIS countries. As an example we can use Ukrainian market that has a lot in common with Russian market and, in fact, by the help of tough competition, during last 15 years has determined possible strategic partners: Claas, John Deree, New Holland, Case for agricultural machinery manufacture modernization. Analyzing of tendency and position of major players at this market can be useful for all participants of Russian market, whose agricultural machinery market can become the most innovative and self-sufficient in the CIS and Eastern Europe.
UKRAINIAN MARKET OF HARVESTING COMBINES
During 9 months of 2013
Ukrainian market with about 2000 harvesting combines annual volume, is the second market between CIS countries by volume, and is in a big interest for Russian, Belarus, EU and USA manufacturers of harvesting combines. This market is regulated only by means of tough competition between world brands, what allows Ukrainian agricultural producer to receive optimal prices for machinery and dealers to invest into modern service infrastructure on Hi-Tech machinery service, such as Claas, John Deere, New Holland, Case. One advantage more of Ukrainian agricultural machinery market, which agricultural producer use at first stages of agribusiness development, is opportunity to purchase used harvesting combine from Europe, which exceeds many domestic models by productivity, efficiency and reliability, and costs much less.
Disadvantage of tough competition and leadership market laws can be considered significant reduction of domestic combines manufacture. According to ASM-Holding’s (Moscow) data in Ukraine during 1-9 months of 2013 have been produced 23 harvesting combines, what is a high result in comparison with the result of the same period of 2012, when there had been produced just 5 harvesting combines. There are different opinions about this important question, but many consider that this is inevitable way of market development. Harvesting combines manufacture in Ukraine can become successful and competitive able, when it will be organized by participation of any from three dominant corporations at Ukrainian market: Claas, John Deere, CNH (New Holland, Case), which could not only prove their competence in conditions of honest and tough competition, but also could create powerful modern infrastructure on agricultural machinery Hi-Tech after-sales support at that time.
Total volume of harvesting combines Ukrainian market during 9 months of 2013 was more than 1 600 pieces, of which: 995 were new imported from EU and USA, 626 were used imported from EU and USA, 60 – imported from CIS, 23 were produced in Ukraine.
As follows from diagrams, more than 90% of market are due to import of new and used harvesting combines from EU and USA.
The largest part of market goes to import of new harvesting combines produced in EU and USA. In this important and perspective market area are dominant with confidence four world-famous brands: Claas, John Deere, New Holland, Case. Between used imported to Ukraine combines are dominant the following brands: Claas and John Deere.
Evidently, brands of Claas, John Deere, CNH corporations have big potential for significant selling increase and for dominance as at Ukrainian, also at Russian markets of harvesting combines. They created necessary competitive environment for successful modernization of “RCM” and “Gomselmash”, which now already use developments of eastern colleagues in their manufacturers.
Under tough competition and transparent game terms Russian and Ukrainian markets have prospect to create on their territories assembly and new high-technological innovative manufactures with high level of localization under brands of CIS, EU and USA. It will give opportunity not only to increase Ukrainian and Russian competitiveness at world markets, but also to create stable competitive agricultural machinery manufacture, that is able to develop at the expense of integration into world high-technological area, aimed at new markets familiarization of innovative production produced in CIS.
Internet Portal About Agricultural Machinery Market: runo-agro.com
Translated by Natalia Dragnieva
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