Recently, with the recent decline in domestic market demand, the construction machinery export market has experienced a major breakthrough and has taken the lead in becoming an important force in promoting the recovery of the industry. Among them, the Russian market shows huge development momentum. From January to June 2023, Russia overtook the United States and became the only country with the largest export market for Chinese construction machinery, with export value reaching US$3 billion, a year-on-year increase of nearly 200%. According to Russian media reports, in terms of export volume, the top three construction machinery companies exporting to Russia at the beginning of 2022 were Japan's Komatsu, the United States' Caterpillar, and the United Kingdom's JCB; by the end of the year, the first three "changed owners" and became the third. Three Chinese companies, First Heavy Industry, Xugong Group and Zoomlion, followed closely by Chinese companies such as Liugong and Lonking.
Zoomlion’s products appear at the International Construction Machinery Bauma Show in Russia
Opportunities and challenges coexist in the Russian market
As an important country along the “Belt and Road”, Russia’s importance to China’s construction machinery industry is self-evident. Its huge potential in the field of infrastructure construction and abundant mineral resources provide a broad market for China’s construction machinery. However, compared with other regions, the difficulties faced by the Russian market are more prominent. The first is the instability of Russia's domestic economy. Due to factors such as the international situation and the fluctuation of oil prices, the main source of Russia's finances, the development of Russia's domestic economy is not stable, which has a certain impact on Chinese construction machinery companies. Hao Jing, Liugong’s Russian sales manager, once said: “Over the years, the biggest difficulty has been that Russia’s economic structure has made the Russian economy vulnerable, but this kind of fluctuation is difficult to foresee, and it is difficult to reduce the impact caused by economic fluctuations. Loss."In addition, Russia's corporate protection policies, high access policies, and high tax rates are also obstacles that Chinese companies have experienced in developing in Russia. In 2014, four local bulldozer manufacturers in Russia applied to the Eurasian Economic Commission for an anti-dumping investigation into bulldozers produced in China under 250 horsepower. In December 2015, five-year sanctions were implemented, and Chinese bulldozer manufacturers were forcibly expropriated. Higher tariffs. When Chinese construction machinery companies enter the Russian market, they must keep a clear mind and be good at identifying problems while seeing opportunities.When the international situation stabilizes and the geopolitical crisis eases, international construction machinery giants will make a comeback, and Chinese brands will face more intense competition. Today, my country's construction machinery companies still have a lot of room for improvement in the international market. While seizing the "window period" for going overseas, they also need to make technical reserves and step up efforts to build an overseas service system. As Mr. Xia Weifu, an in-depth observer of China's industrial economy, said: "In the development of overseas markets, Chinese construction machinery companies should pay more attention to differentiated competition of their own products, channel construction and improvement of support capabilities, and abandon the low-cost homogeneity. Instead of gaining market share at low prices in a short period of time, we should unite and organize different manufacturers to become friends, respond to changes in market policies with joint strength, and jointly build international Chinese brands."
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