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Russian machinery falls

August 2014

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PMR noted that with the decline in construction machinery stock since 2000, the most substantial reduction in the number of units of equipment in use at large- and medium-sized companies has been observed for scrapers (down 83%) and wheeled cranes (-66%). The numbers of crawler, mobile and tower cranes has more than halved. A smaller reduction – but still more than 40% – was seen among single-bucket excavators and motor graders. PMR said the reduction in the number of machines in use was not because they were redundant. In fact, it said, demand for construction equipment was rising steadily, but rundown equipment was being withdrawn from use and not being replaced by new machinery at a sufficient rate.

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Price is, however, no longer such an advantageous facet of Russian machinery, which has become more expensive in recent years, said PMR. With old and obsolete production facilities, Russian manufacturers are increasingly using Western parts in their machinery, it said. In addition, the cost advantage from lower energy prices has narrowed significantly in recent years, as Russia has been forced to reduce the gap in energy prices as a condition of joining the World Trade Organisation. PMR said all of these factors had inevitably led to rises in the prices of the final products. Moreover, the price factor is no longer a competitive advantage for Russian models when they have to compete with Chinese equivalents.

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Source: http://www.khl.com/magazines/construction-europe/detail/item99787/Russian-machinery-falls

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