Russia Increased Freight Car Manufacture +28.8% in 2016

Russian freight car manufacture 36,600 freight cars in 2016, the Interfax reports. It is up 28.8% in 2016 compared to 2015.

The reason for such boost was Government support to freight car manufacturers and customers.

In 2016 the Russian Government approved a ban for operation of freight cars with life extended after January 1, 2016. Only a few freight car types were excluded from the ban list: these were tank cars for foodstuffs, acids and chemical freight, refrigerator cars, thermal cars, icing cars, diesel power station freight cars, transporter cars, flat cars for wheeled and caterpillar vehicles and railway infrastructure service freight cars. Furthermore, some of the costs borne by freight car manufacturers producing innovative freight cars (i.e. those with imported specs) were subsidized by the Government. Up to 3 B RUB (50.7 M USD) was allocated for these purposes in the federal budget.

The subsidy was coupled with a discount that freight car customers received for scrapping obsolete cars. The Government allocated additional 7 B RUB (118.2 M USD) for that.

In 2017 Russia is to support transport machine-builders at 5.4 B RUB (91.2 M USD). The customer subsidy is to be extended to 2017 at 5 B RUB (84.4 M USD) - the expectation is that 16,700 innovative freight cars will be bought. The balance 0.4 B RUB (6.8 M USD) customer subsidies is to be allocated to shunting locomotive customers: the Government expects to sell 54 shunters thanks to this subsidy.