Russian representation

By CECE09 May 2008

The construction equipment sector in Russia has established the industry's first trade association under the auspices of the Association of Europe Businesses in the Russian Federation (AEB). February 4 saw five founding companies - Caterpillar, Komatsu, Liebherr, Manitowoc and Volvo vote to set up a Construction Equipment (CE) Committee within AEB, which will represent the industry's interests.

Besides these voting members, the inaugural meeting was attended by a number of other manufacturers' representatives including Bobcat and Russia's largest domestic manufacturer, Gaz Group, which have expressed an interest in full membership. Even at this early stage, it looks likely that the CE Committee of AEB will be the main voice of the industry in Russia.

Legislation

One of the key aims of the CE Committee is to represent the industry to Russia's law makers as new legislation for the industry is developed. This should be more effective than lobbying by individual companies, and should also ensure that the industry's needs, rather than those of any one manufacturer, are represented.

It seems likely that Russia will adopt more stringent emissions laws over the coming years - current requirements for machines are less than European Stage I. As legislation moves forward and gets more technically demanding, the CE Committee believes it will be increasingly important for the industry to put its point of view.

As well as ensuring the timetable of any new laws gives the industry enough time to find the right technological solutions for Russia. Beyond engines and construction machines themselves, more stringent emissions control will require higher quality fuels to be available on the market.

Russian law makers need to be aware of these issues to ensure the next step of emissions control is successful and that its standards remain reasonably well harmonised with the US, Europe and Japan.

Statistics

Another important reason for setting up the group is to establish a programme of statistical exchange, along the same lines as CECE's and those of its sister associations around the world.

At the moment there is only a partial picture of the size and of Russia's construction equipment industry available, based on customs information and limited exchanges of information.

There is also a clear need for regional statistics. At more than 17 million km2 Russia is by far the largest country in the world - it is +70% bigger than the next largest, Canada - and it has a population of around 140 million people. In a territory of this size, nation-wide data is of limited use.

What is known at the moment is that last year the Russian market for construction equipment totalled about 20500 machines. These were made up of about 13000 imported from Western manufacturers, 2500 imported from China (mostly wheel loaders) and about 5000 built domestically.

Excavators in the 20 to 30 tonne weight classes account for about 25% of the units sold, and backhoe loaders represent about 20% of the market. Around 60% of the wheel loaders sold in Russia are imported from China.

By Western standards the Russian market is sparsely populated. If equipment sales per head of population were on a par with Western Europe, the market would be about 100000 machines per year. This may sound a long way off, but the last few years have seen remarkable growth. Imports to Russia grew +110% in 2007, and growth around the +100% market has been the norm for the last few years.

Shows & links

AEB's CE Committee is keen for the Russian industry to have a strong domestic trade show. It is supporting the US-based Association of Equipment Manufacturer's (AEM's) new ConExpo Russia exhibition, which will be held in Moscow from 15 to 18 September this year.

The CE Committee also hopes to establish formal links with both the AEM and CECE and is grateful for CECE's support and advice during its conception and birth.

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