Russian manufacturers of equipment were afraid of competition with China

Russian manufacturers of industrial equipment were afraid of fierce competition with Chinese companies and asked the government to urgently take measures that would greatly simplify the access of domestic manufacturers to public procurement. This is reported by RBC with reference to a letter from the general director of the Spetsavtoprom association Denis Kudryavtsev, who confirmed the authenticity of the letter to the publication.

Spetsavtoprom unites manufacturers of road construction equipment, wheeled and self-propelled vehicles. The Association proposes to several times increase the price priority of Russian producers over foreign ones in public procurement. This is done primarily because of the impossibility of competing with Chinese manufacturers in the current market conditions.

Since 2017, in the framework of public procurement, in which Russian and foreign companies participate, domestic producers have a so-called “price priority” of 15%. During an open auction, the bid of a domestic company is considered to be 15% lower than the one proposed, which significantly increases the competitiveness of Russian companies. However, even if the “price priority” did not help the Russian company win the tender, then the foreign company will be forced to drop 15% of the cost from its application.

Spetsavtoprom wants to bring these discriminatory conditions to 65%, since in the conditions of a too strong ruble exchange rate, Russian equipment turned out to be simply uncompetitive in comparison with Chinese counterparts, which began to rapidly capture the market after the departure of Western companies. The proposal of the association is currently being worked out by the Ministry of Economic Development and the Ministry of Industry and Trade, the departments support ideas to support domestic producers, however, additional justification will be required to increase the price priority to 65%.

Kudryavtsev insists that the current market conditions "cause irreparable damage to the domestic road construction industry." He proposes to increase the "price priority" "at least for half a year": during this period, in his opinion, Russian manufacturers of equipment will be able to adapt to new conditions. “During this time, our enterprises, which for the most part are out of work, because Chinese equipment is now very cheap, could replenish working capital by releasing equipment,” he is sure.

Before the war, the Russian market for special equipment was dominated by foreign companies, in particular, Caterpillar and Deere. Western brands accounted for up to 90% of equipment, but Western brands have decided to either drastically reduce their presence in the Russian market or leave it altogether. The dominance of Chinese companies previously faced the truck market, which Chinese companies took over in just a month.

American Daily Newspaper

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