Leasing experts at Gazprom assessed the prospects for Chinese construction equipment in Russia. China's construction equipment market share is expected to continue to grow by the end of the year, in spite of higher taxes on imported equipment, currency fluctuations and the resulting price increases.
For the 2024 year, imports of Russian construction equipment could rise by 8 percentage points (from 57 per cent to 65 per cent) . China accounts for a higher proportion of companies and self-employed individuals who buy new equipment through leasing. The figure for the first eight months of the year was 66 per cent (and even 70 per cent in peak months) . This compares with 63 per cent in the 2023 period and just 43 per cent in 2022. The annual growth rate has slowed down, mainly due to market factors. This year's equipment renewal subsidy conditions than last year, but demand remains stable. One of the reasons for the growth of Chinese equipment in the Russian market is the high level of interest of Chinese manufacturers in the Russian market. Currently, more than 150 Chinese construction equipment brands are sold in Russia, up from 37 in 2022. The top five brands in the market for the third consecutive year are all Chinese: XCMG, Sany, Lonking, LGCE and Liugong. Eight of the top 10 models sold this year have come from Chinese brands.
In terms of type of equipment, the 2024 in the first half of the company's sales of construction machinery and equipment, loaders accounted for 47% , excavators accounted for 38% , truck cranes accounted for 7% , rollers accounted for 3% , and other equipment accounted for 6% . Chinese brands dominate in all subcategories. However, annual sales growth of construction equipment in China has slowed, largely because of higher prices, linked to the central bank's increase in benchmark interest rates and the indexation of recycling taxes. With effect from 1 July, the 2024 tax on some construction machinery and equipment, including loaders and heavy bulldozers, will be increased. Leasing companies and suppliers are working together on joint projects to mitigate the impact of price increases. However, equipment prices are expected to rise by 10-30 per cent by the end of 2025, depending on the type of equipment, with the recovery tax set to rise again from January. Although there are few substitutes for Chinese construction equipment in the current market conditions, russian-made equipment has a market share of less than 6 per cent. Even with government support from the Ministry of Industry and trade's preferential leasing scheme, domestic manufacturers are only able to meet a fraction of demand.
"Under the current situation, no matter what happens, this year's market will end up with positive growth, with the proportion of Chinese construction equipment leased approaching or exceeding 65 per cent," said Alexandre Kornev, head of the importer cooperation management department at Gazprom Leasing.