Regarding the current situation of components and consumables in the Russian market, the demand for components from China, Japan, South Korea, the United States, and Europe in Russia, and how to meet these demands, Russian company representatives also discussed the possibility of producing consumables domestically.
Is the demand for components and consumables increasing, and what are the reasons? What impact will this trend bring? Anton Voronin (XCMG Russia): The reason for the growth in demand is the increase in the number of equipment, which means that machines are no longer idle and will inevitably require more maintenance and repair materials. Therefore, the demand for filters, lubricants, and some small consumables is constantly increasing. With the increase of equipment usage time, the demand for components has also changed, especially for engine, walking system, hydraulic system, and transmission system components, which have higher prices, thus driving sales growth. But this will not bring too much difficulty, as the components required for technical maintenance have been identified and stocked according to demand. Alexei Eugene (Palfiger Crane Company): Currently, we are seeing an increase in demand for components, which is related to the increasing number of truck cranes on new large construction sites in Russia. Therefore, we also see opportunities for business expansion. Mikhail Chusov (Phoenix Lubricants): Our mission is to provide high-quality lubricants, fill the gaps left by international brands that have left, and provide technical support to customers to ensure the correct selection of products. With the exit of international brands from the market, import substitution has gradually promoted the use of domestically produced lubricants in Russia. However, measures to restrict the import of oil products have resulted in many construction sites and fixed equipment using unfamiliar lubricants, which increases maintenance costs, including unexpected shutdowns and repair expenses. To reduce these risks, we provide complete product documentation, including quality certificates, safety certificates, analysis reports, etc., to ensure the legality and authenticity of the product. Ivan Kanivitz (Kama AVTO, Russia): As buyers increasingly focus on improving the service life of equipment, the demand for components continues to increase. This is a personalized issue for every device owner. Konstantin Modnikov (Sotrans Parts, Russia): We have indeed seen an increase in demand for parts and consumables. Firstly, due to the reduction in the supply of original parts from Europe and the gradual replacement of Chinese substitutes, the maintenance cycle has been shortened.
How many months of component inventory should be kept at present? Has this number increased? Is the inventory increasing? Anton Voronin (XCMG Russia): The most commonly used components usually need to be stocked for 6 to 12 months. We have found that more and more popular components need to be stocked because some components cannot be supplied from China in a timely manner. To ensure stable supply, it is necessary to maintain a certain inventory. Alexei Eugene (Palfiger Crane Company): Our company has decided to maintain inventory levels for 3 to 4 months because we have a stable and even supply. Ivan Kanivitz (Kama AVTO, Russia): With the expansion of imported and domestically produced equipment, our customers' inventory has increased. Compared to the pandemic and sanctions period, inventory has increased, but we still need to adjust logistics, pricing, and delivery cycles. Konstantin Modnikov (Sotrans Parts, Russia): Considering price increases and exchange rate fluctuations, we recommend stocking up on at least one month's worth of parts inventory. Small companies usually reduce their inventory levels, while large customers tend to plan for the long term and continue to stock up on components.
What is the demand for components for domestically produced, imported, and specific country equipment? Anton Voronin (XCMG Russia): There are certain issues with the supply of components in Russia, especially with the withdrawal of European suppliers leading to difficulties in purchasing components. Many Russian manufacturers have not purchased consumables and components for their equipment, mainly due to inadequate post production support services. Many customers seek alternative parts through other channels and utilize multi brand suppliers to find available alternatives. Konstantin Modnikov (Sotrans Parts, Russia): For domestically produced equipment such as "Kama" and "Ural" brands, the supply of certain components still faces challenges, especially regarding production priorities related to the defense industry.
Has there been any improvement in the supply of components for Chinese equipment? Can parts be ordered based on the device identification number? Anton Voronin (XCMG Russia): In collaboration with large manufacturers, we are improving our parts catalog and optimizing after-sales support through our own technical means and service manuals. For example, the walking system components produced by XCMG Group cover all relevant technical requirements. We are still doing cross matching to provide compatible components for other brands. Alexei Eugene (Palfinger Crane Company): Currently, our parts catalog is complete and the required parts can be found by the identification number of the equipment. Although there were payment issues, we have promptly resolved them. Ivan Kanivitz (Kama AVTO, Russia): The parts catalog for Chinese equipment has improved, but there are still some issues. Payment, delivery time, and customs clearance remain major challenges.
Has the supply of components for Japanese equipment completely stopped? How should we respond if there is a disruption in future supply channels? Anton Voronin (XCMG Russia): Although the supply of some components has been restricted by sanctions, it has not completely stopped. Most Russian customers meet their needs through parallel imports or by choosing substitutes. The demand for components of Japanese equipment mainly increases during major repairs, and we can still obtain relevant components through Chinese manufacturers. Konstantin Modnikov (Sotrans Parts, Russia): In the past few years, it has been proven that alternative supply routes for components can be found. The key issue is the final cost of these components.