Home / Business Intelligence / Russian rolling stock market drops by 37 percent in 2015, freight wagon exports increase
Russian rolling stock market drops by 37 percent in 2015

Russian rolling stock market drops by 37 percent in 2015, freight wagon exports increase

The Russian Government has approved the directive for supporting transport engineering sector in 2016, stated Russian Prime Minister Dmitry Medvedev during a meeting analysing the prospects for the development of transport engineering. 

“The programme contains a number of important provisions –  first, a ban on the use of carriages with an extended lifespan and second, subsidies to investment projects to produce innovative freight cars. Third, we will reimburse operators new-carriage procurement costs. Up to 7 billion roubles have been earmarked for this purpose. The decision was taken to reduce VAT on passenger service on long-distance trains by 8 percent to 10 percent. Operators, primarily the Federal Passenger Company, will spend the resulting funds on procuring new rolling stock’, said Medvedev. 

The market for all types of rolling stock declined by 37 percent in 2015, while the volume of rolling stock exports increased by two-thirds. The government offered subsidies to stimulate demand for innovative carriages and provided RUB 1 billion and 1.5 billion in subsidies for technological modernisation and for paying interest on working asset loans, respectively.

An amount of RUB 60 billion from the National Wealth Fund was invested in Russian Railways bonds. The funds were spent on procuring locomotives.  About RUB 1.4 billion was provided to support the export of the high-tech goods of rolling stock manufacturers. “VEB financing of a contract to supply Uralvagonzavod cars to Azerbaijan was of key importance. More talks are underway. This week, I will sign off on the VEB Supervisory Council’s decision to grant three loans to support the export of passenger and freight cars – for Metrovagonmash to Hungary and for Uralvagonzavod to Iran and Kazakhstan”, said the prime minister.

Last week Russia signed an agreement with Egypt for the delivery of 700 wagons, informed Denis Manturov Minister of Trade and Industry of the Russian Federation. He also said that despite the decline in the domestic market for rail freight wagons, Russian manufacturers have increased export deliveries to 6000 wagons to Azerbaijan, Kazakhstan, Estonia, Latvia and several other states. In order to maintain the level of profitability, production in 2016 has to reach least 40,000 units.

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