Kharkiv Tractor Plant expects a significant drop in sales in the first half of 2016 compared to the same period of 2015 due to the impossibility of sales in Russia, as well as due to Russia's introducing import duty on tractors and vehicle recycling tax for agricultural machinery.
"The main problem today is product sales in Russia. In addition, from January 1 this year a 10% duty on our products (within the abolition of a free trade regime) and from February 6 this year a 15% vehicle recycling tax was introduced, therefore prices for our tractors automatically rise by at least 25%," plant CEO Vladyslav Hubin told Interfax-Ukraine.
He added that Russia also has a state program of 30% compensation for the value of domestic agricultural machinery (unlike Ukraine) and, given a significant rise in the price of Ukrainian tractors, their niche will be taken by Russian and Belarusian producers.
"We won't just lose the market, moreover, we'll worsen our positions, so over the first half of the year sales could fall significantly," he said.
He refrained from forecasts for the entire year, but added that such a situation cannot affect the results of work.
"I cannot say right now what situation in the second half of the year will be, we have developed a program of specific marketing activities, but the results are likely to be negative," he added.
