Export-led growth in railcar making segment will contribute a lot in thedevelopment of machine-building industry in the medium term. This year,demand for freight railcars has outstripped supply by 20-30% in the CIS.Therefore, with their order books full for the next year and a half, Ukrainianproducers have an optimistic outlook for the future. Now, railcars importedfrom Ukraine account for some 40% in consumption in the Russian market and25% - in the CIS market. Despite a continuous growth in the production cost,Ukrainian railcars remain more price competitive than those originating fromother countries. Thus, Azovmash concluded a big contract for 1,000 rail tanks for Russia.s Brunswick Rail in Q1. Capacity utilization being high at Ukrainianplants, the output of railcars will gain 10-15% in the near term, expertsestimate. Since the industry is highly bound up with developments in theRussian market, the industry outlook does not seem very promising. Possibleprotection measures in the market and growing investments in expansion ofRussian capacities, railcar production may decline in Ukraine in 2013-2015.
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