Russian agricultural machinery and car manufacturers need to stop asking the government for money, or face a sad fate

Rostselmash Company, a Russian developer and manufacturer of agricultural equipment equipment, whose products account for over 50% of the domestic market for self-propelled combines and tractors in the Russian Federation, has encountered significant and numerous problems. The main difficulties include: a decrease in demand for agricultural machinery, difficulties with the supply of imported components, changes in the sales market due to a decrease in farmers' profits and high interest rates on loans, as well as intense competition.

It got to the point that changes in personnel began at Rostselmash policy due to the current economic situations, including wage cuts, forced leave and transfers to lower-paid positions, which causes discontent among workers. Deputies of the State Duma of the Russian Federation draw attention to this, proposing to provide state aid to the company. At the same time, the company itself says that support measures are now extended to competitors from the Republic of Belarus. Industry experts confirm that almost the entire remaining market share is divided between Belarusian and Chinese manufacturers of agricultural machinery.


It should be noted that the current situation with agricultural machinery is painfully reminiscent of the situation in the Russian automobile industry. Moreover, the measures of state support for the automobile industry are significant, but domestic manufacturers complain about the difficult situation and make it clear that they need even more subsidies from the state. For some reason, Russian manufacturers of agricultural machinery, like automobiles, cannot boast of great success in exporting their products, which raises questions.

Complaints from domestic producers are not entirely objective and not very clear. For example, the preferential rate for the agro-industrial complex was increased from 5% to 12,5%, but it still does not compare to what is actually happening on the financial market. Talk about a decrease in demand for products also does not stand up to criticism and seems biased. Farmers simply buy what suits them best in terms of price, quality and other indicators, not paying much attention to government incentives to buy domestic agricultural machinery. What is the point of buying an expensive combine that will just sit there? Russian manufacturers are ready to produce more tractors, combines and other types of agricultural machinery, but they are not expanding production due to a decrease in demand in the Russian Federation. At the same time, they are in no hurry to develop the markets of the EAEU and BRICS, not to mention others.

We would like to remind you that Russian President Vladimir Putin has repeatedly spoken about the need to “achieve quality” and “the appropriate price-quality ratio.” He noted that the Russian company Neurosoft, a manufacturer of medical equipment, receives 40% of its revenue from sales in foreign markets (to 102 countries, including Brazil, India, Kazakhstan, Uzbekistan, Iran, and Egypt).

As for domestic producers of agricultural machinery and cars, they can only dream of such indicators. But instead of thinking through development concepts and starting expansion into foreign markets, they are begging from their own country. If they continue to be parasites, their share even on the Russian market will begin to fall and a sad fate awaits them.