‘Until 2022, none of the experts got hysterical’
Threat of Chinese expansion is considered exaggerated
KAMAZ's share in the Russian truck market has been falling for the second year in a row, analysts say. In 2023, it occupied just over 20% of the market, while Chinese manufacturers have already captured more than 60%, according to estimates by Autostat-Info. In the first three months of 2024, KAMAZ's share sank even more. However, representatives of the auto giant are sure that experts incorrectly calculated the market and do not have all the information, some of which cannot be disclosed today. About the truck market in Russia and the features of Chinese expansion — in the review of the analytical service of Realnoe Vremya.
Has China moved not only the Big Seven, but also KAMAZ?
According to the results of 2023, the leadership in the Russian truck market definitely belongs to China — its share has almost doubled in 2023— from 30.5% to 60.6%, or 87.4 thousand units, Autostat Info expert Alexander Klimnov estimated the balance of power in the market. The share of foreign cars in the Russian market as a whole increased from 44.5% to 66.1%, that is, from less than half to almost 2/3 of the market.
At the same time, in 2 months of 2024, China's share in the truck market increased from 53% to 61.6%, or up to 11.2 thousand cars, Klimnov notes. First of all, China has occupied the niche of the “European Big Seven”, which was emptied due to sanctions. According to the expert, the share of Europeans in 2023 fell by 14.4%, to less than 5.5 thousand cars (3.8% of the market against 7.6% a year earlier).
Chinese BAW, Beiben, Beifang Benchi, CAMC, Chenglong, Chusheng, Fengchuen, JMC, Liugong/LTC, SDAC and Yuejin are represented on the Russian market today, as well as “as if Russian” Valdai (in fact, Foton with other nameplates). According to his estimates, Dongfeng increased its presence the most — from a single sale in 2022 to 4.7 thousand trucks in 2023, the expert said.
Chinese manufacturers have replaced not only European ones, but also significantly displaced domestic brands. Domestic cargo brands increased by only 4% in 2023, to 48.9 thousand cars, which, against the background of a 70% growth in the market as a whole, means a reduction in their share from 55.5% to 33.9%, the expert calculated.
KAMAZ itself, according to estimates by Autostat-Info, sank by 1.7% last year, to 31.5 thousand, and its share fell from 37.8% to 21.8%. In 2 months of 2024, KAMAZ has already fallen by 19.3%, as for March — preliminary data indicate a 35% drop, Klimnov said.
“In part, the reduction in the share of KAMAZ is due to the effect of sanctions, which are gradually being overcome, but mainly with limited supplies to the civilian market due to the heavy workload of law enforcement agencies," the expert believes. “However, the factor of competition with Chinese and European manufacturers is also present.”
KAMAZ's revenue under IFRS increased by 27%
The consolidated revenue of KAMAZ PJSC's group of organisations, according to international accounting standards, amounted to 370.3 billion rubles, exceeding the level of last year by 27%. Net profit for the year amounted to 16.9 billion rubles. Significant revenue growth rates are due to increased sales in the segments of trucks and passenger transport (buses and electric buses), according to the company's website.
Net debt amounted to 57.2 billion rubles, which is by 16% lower than last year's figure at the end of 2023. The ratio of net debt to EBITDA was 1.7 times in 2023. In 2023, the implementation of projects aimed at updating the model range continued, including on a sanctions-resistant basis. The investment programme was implemented in the amount of 8.6% of revenue, KAMAZ reported.
“Taking into account the importance of ensuring the technological sovereignty of the country, we will continue to implement projects for the development of the K5 model range, the localisation of automotive components for the line of small and medium-tonnage Compass cars. Besides, we will continue to improve production and equipment to participate in the implementation of federal projects to upgrade passenger vehicles for regions and municipalities of Russia," commented Sergey Kogogin, CEO of KAMAZ PJSC.
“The data is incorrect”
Oleg Afanasyev, the head of the press service of KAMAZ PJSC, explained that the Autostat data could not be correct. “Firstly, they include low-tonnage trucks up to 14 tonnes in the truck market. While we produce trucks over 14 tonnes, and all over the world this is called the heavy truck market and is considered separately," he explained. “Secondly, Autostat counts the truck market by traffic police registrations, but this number does not include Russian trucks supplied to law enforcement agencies and to new territories. We do not have the right to disclose our numerical indicators, but I can say that by the end of 2022 and by the end of 2023, our production has not only not decreased, but also increased, it's just that not all trucks fall into the statistics of Autostat. This applies to all Russian manufacturers, not only KAMAZ.
Afanasyev also notes that the share of foreign manufacturers in the Russian truck market in all post-Soviet years ranged from 30% to 60%.
Now, various Chinese manufacturers have taken over the share of unfriendly manufacturers who voluntarily left, which actually saved the Russian market from collapse, Afanasyev emphasises. “Russian manufacturers are limited in their production capacities, which cannot be doubled simultaneously to cover all market needs," he says. “Besides, in 2023, due to the reorientation of the Russian economy to the East and the growth of transportation in this direction, the Russian heavy truck market grew to phenomenal figures of 147 thousand trucks. This is the best result in all the post-Soviet years.”
“Indeed, in 2022 (not in 2023!) we suspended the production of K5 trucks, which had quite a lot of components from unfriendly countries, but compensated for this with the production of K3 generation trucks. But already in 2023, we produced K5 in the amount of 5,000 units, which is a historical maximum since 2020, when it went into production," explains the representative of the plant.
“From February 2023, KAMAZ has resumed the production of the 54901 model on a sanctions-resistant basis, replacing more than 2.3 thousand components with Russian or Eastern ones," he stressed. “By the way, many Russian and not only enterprises were not ready in terms of the quality of components, so consumers have complaints about the new K5. We do not conceal this and are working to correct the shortcomings.”
After phenomenal growth in 2023, the heavy truck market in Russia is going to decrease this year, according to KAMAZ estimates, to 110 thousand. “In March, there was already a decline in sales. This was expected, since the average annual market for heavy trucks over the past 20 years ranges from 90 to 110 thousand units a year," he said.
“KAMAZ has good prospects”
If necessary, KAMAZ Group can increase production volumes and constantly modernise them. According to his estimates, KAMAZ has good prospects for further development. In February, the group published a strategic development programme for the company for the period up to 2030, which provides for an increase in revenue in excess of 805 billion rubles by the end of this year.
By the end of 2030, it is planned to increase the sales of trucks to about 60 thousand units, and the share of sales abroad is expected to amount to 16%. It is planned to diversify the product range, to produce more not only trucks, but also other machinery and equipment. The company also plans to increase production volumes: in February 2024, the main conveyor switched to the production of 200 cars a day, an increase in production to 220 cars a day is scheduled for the fourth quarter of this year, and next year it is planned to produce 240 cars a day.