Kryukiv Railcar output plunges 6x yoy in 2M14

Freight railcar output at Kryukiv Railcar (KVBZ UK), Ukraine’s leading railway machinery producer, plunged 6.0x yoy to 175 units in 2M14, the company’s press service reported via the Interfax news agency on March 18. The company has produced no passenger cars in 2014, while it assembled five railcars in 2M13. The company is currently working 2-3 days per week, according to the source.

Alexander Paraschiy: As soon as Russian railcar market becomes self-sufficient in 2013, there is no chance that demand for Ukrainian freight railcars will be restored there. Prospects for railcar sales in Ukraine are also muted as total potential demand covers only less than a third of local producers’ production capacity. The only chance for Kryukiv Railcar to sustain its future is to refocus on passenger cars and trains, while the future of these segments will again depend on local demand, which does not look sizeable at the moment. The company never sold its products beyond the former Soviet states, which have a unique rail gauge. We confirm our view that Ukraine’s railcar producers are fading companies.