Large Russian Automakers Resume Work After One Week Stop
Many automakers who suspended work March 30 in Russian, as ordered by the government to the reduce spread of the COVID-19 resumed work April 6. The firms including KAMAZ, AutoVAZ, GAZ Group, Mazda Sollers.
However, 98% of office personnel are working remotely. Started working YAMZ, Yaroslavl plant of diesel apparatus and some production lines of Likino bus plant. Procurement production of GAZ plant in Nizhny Novgorod is also working. Schedule of main production lines will be determined within a week depending on situation on suppliers’ plants. Read The Article
PSR Analysis: Most of the machine makers (at least large ones) will be working this April. Mercedes-Benz and Fuso truck production resumed April 13. Chetra and ChTZ returned April 6. It seems that most have no problem with parts supply, and that they expect to sell their product. A catastrophic scenario is not likely. PSR
Authorities Budget US$ 71 Million for Purchase of Ambulances
Officials say the government has US$ 71 Million to purchase ambulances in Russian. “This sum will permit us to supply about 1200 vehicles to the regions”- told prime minister during the government meeting dedicated to COVID measures. Read The Article
PSR Analysis: The recipients of this money will be GAZ and PSMA. Ford also is being considered. This is an example of anti-COVID-19 measures which also support domestic LCV makers. PSR
Market Decline Is Expected, But No Machinery Shortages Seen
A significant decline of the construction machinery market in Russia, at least in April and May, says an official of JCB Russia. This forecast is tied to suspension activity of small and medium size enterprises because of “self-isolation” programs, implemented by government to battle COVID-19. Strategic construction works will continue, and this will provide certain demand on the machines.
“The situation we observe around the world will definitely lead to decrease of production volumes for certain machinery classes,” said the official. Since market demand also will decrease, JCB does not expect a shortage of machines for its customers.
Machine prices have increased proportionally to the Russian Ruble devaluation. Read The Article
PSR Analysis: Other market players also have noted reduced demand for construction machinery. Inquiries are down by 20%. Annual decrease from the optimistic scenario could reach 20%, or down as much as 50% is a worst-case scenario, if the quarantine measures last until September. In this situation, a smaller impact will be felt by domestic manufacturers; because of the Ruble devaluation, their production has become more competitive. Chinese OEMs also will be affected less because with reduced production around the world, Chinese brands have grown in Russian. PSR
Maxim Sakov is Market Consultant, Russia
