The Minsk Tractor Plant (MTZ) is considering plans to reduce its dealer network in Russia. The company is revising its requirements for service and maintenance, which will lead to a reduction in the network. MTZ CEO Taras Murah told Vedomosti.
MTZ currently has 89 dealers and five of its own trading houses in Russia, which accounts for 55% of the plant’s exports by value. In the first half of the year, MTZ’s revenue from exports to Russia fell by 2%.
Murah noted that Russian farmers are under pressure from external factors, are experiencing a decline in grain exports and lower grain prices. All this limits their ability to renew their machinery. Despite this, the plant expects to increase exports by 2% for the year.
“If we are already unable to compete very well in terms of price [with foreign machinery, including Chinese equipment], and we have reached price parity, then when it comes to reliability, ease of repair and low cost of ownership due to the convenient availability of spare parts at every location — these are all our strengths. And I still hope that our customers will not turn away from us,” Murah said.
As Vedomosti was told by Alexander Altynov, chairman of the board of the Association of Agricultural Machinery Dealers, two-thirds of Russia’s tractor fleet consists of MTZ products. He also described the Belarusian plant’s dealer network as not very efficient: dealer margins are low in the mass-market segment, while the after-sales service market is virtually nonexistent.
Altynov also assessed the prospects for the Belarus 5425 tractor with an output of 542 horsepower. In his view, the market niche for such tractors in Russia is about 100 units a year.
