Russian market is expected to grow owing to sales in regions
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The Russian climate equipment market has been demonstrating the highest growth rates in Europe for the last years. Unlike the mid 90-s when household ACU market were in the greatest demand, from 1998 the popularity was gained by central air conditioning systems and ventilation equipment, which sales have been increasing by 25% against the previous season for the last 5 years in a row. Any economist would call this situation as a boom. But a number of factors show that this market segments is only at the early stage of its development. First of all, it is the climate equipment market structure by Russia’s regions.
FIGURE 1 (Source: Georgy Litvinchuk)
One can see that all regions of Russia except the cities of Moscow and S-Petersburg (North-West) have a small share of central air conditioning systems and ventilation equipment. High share of this equipment in North-West can be explained by a number of factors. First, it was the first region where serious climate equipment was introduced as early as in 1993. Second, this region is famous for the greatest number of professional people in the field of refrigerating and ventilation engineering. Nowadays Moscow and S-Petersburg account for about 50% and a bit less than 20% respectively of the Russian central air conditioning systems and ventilation equipment. But everything points to the fact that such situation will not last for a long time. The same situation was in 1994-96 on the Splits and Window ACU market where Moscow and S-Petersburg take only 1/3 of all sales now.
The fact that central air conditioning systems and ventilation equipment market has doubled in Ural, where summer was cold and Splits sales remained at the previous season level, demonstrates clearly the rates of changes in regional markets structure. Especially if one takes into account that central air conditioning systems and ventilation equipment sales increased by 40% in Russia as a whole. In other words a share of serious equipment sold in regions is rapidly increasing and one can expect its 4-5 times growth within the next three years while in Moscow and S-Petersburg it may only double for the same period.
It is also worth noting that customers started paying more attention to equipment prices and production dates than to manufacturers’ popularity and long business history. This fact led to sudden changes in the air conditioning systems and ventilation equipment market structure. So nowadays these are two companies – VTS Clima and the Russian corporation VEZA that account for about 60% of all central conditioners and ventilation equipment sales while before the crisis of 1998 they were the last ones among the first ten sales leaders. In general, minimum 8 domestic manufacturers declared about the production of central conditioners and ventilation equipment in 2001.
The changes on the cooling equipment market are not so great. However, a share of three leaders – TRANE, YORK, CARRIER is falling year by year while a number of brands presented on this market is rapidly increasing.
A rapid development of domestic production is the main tendency of ventilation equipment market for the last two years. Meanwhile, these are mainly air pipes, air gates, mufflers and valves. At the same time domestic producers are gradually setting up a manufacture of up-to-date duct ventilators with the temporary use of foreign impellers and engines. But it seems to be at the early stage of its development.