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16.05.2013

MAZ may face bankruptcy  ? 145

9:16, — Economics

MAZ may face bankruptcy

Belarus's biggest plant may face collapse due to a decrease in sales.

According to results of the first quarter of 2013, a share of the Belarusian manufacturer in the Russian market of 14-40 tonnes trucks reduced to 7.4% compared to 14.3% for the same period last year. A correspondent of ucpb.org asked economist Leu Marholin why it happened and what prospects Belarusian manufacturers have.

Speaking about the activity of Minsk Automobile Plant (MAZ) in the Russian Federation that resulted in almost twofold reduction of its share in the Russian market, we should bear in mind two things, Leu Marholin says. Firstly, despite Russia has more developed market relations than Belarus, we should not rule out a possibility of influence from the Russian government that would like to punish Belarusians for their refusal to merge with KAMAZ. But we must take into account another thing. There are many reasons that hinder MAZ's activity in the Russian market. I think it wouldn't be a mistake to say that it is the smallest manufacturer in the heavy trucks market. The smaller the plant, the more it difficult to compete with large manufacturers. If earlier the price-quality ratio was significant, it is not so important now, when most of the world's car manufacturers have already opened or will open plants in Russia thus localising production in Russia and reducing product prices. Taking into account that the manufacturers that already opened plants in Russia (Volvo, Renault and Scania) will ramp up production and that MAN (Germany), DAF (the Netherlands) and even FAW (China) are going to open plants in Russia in the two nearest years, one can foresee that MAZ will face even more complicated conditions in the Russian market every year.

The economist thinks MAZ may disappear if it doesn't find its market niche.

I wouldn't dare say the merger with KAMAZ is the best way out. We need to find our own place in the international division of labour and integrate with European manufacturers. Even they create alliances, because one cannot survive on its own in a highly competitive market. The matter is whether the Belarusian plant finds its place in the international division of labour or the situation will get worse until the plant dies slowly, as it already happened to other manufacturers, Leu Marholin says.


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