However the wall hung market showed impressive growth rates in both 2004 and 2005 and it appears the Russian market is finally poised to take off. The two precedents of Romania and Ukraine show that when heating systems are converted from district heating, the potential for wall hung boiler sales is huge.
The share of combi in wall hung boilers in Russia is quite high at around 90% of all wall hung boilers sold, of which around 10% have a built in storage tank. For most end users there is little sense in installing heating-only boilers and there is no domestic manufacturer that promotes heating only as in some East European countries.
However, the majority of floor standing gas boilers are heating only, given the lion's share of Russian made inexpensive products. The combined share of wall-hung and floor-standing heating only boilers is high, at 84% in 2005, down from 86% in 2004.
Sales of condensing boilers are marginal in Russia and estimated at around 1,500 units in the wall hung sector. Many manufacturers do not yet offer their condensing products in Russia.
There are at least two factors hindering sales of condensing boilers in Russia, namely the low cost of mains gas which makes little sense to buy more expensive equipment, and the fact that ecological awareness is very low in Russia.
Nonetheless in 2005 Ariston, Baxi and Vaillant have been actively promoting condensing boilers in Russia. Therefore condensing boilers are driven by manufacturers who promote this premium range, in part to market their brand image.
The main market drivers in Russia are as follows:
For new building: increasing new house construction of both flats and detached houses. In rich Russian regions (such as the Moscow region) there is active construction of elite housing.
Apart from the improving economy, another main factor for future house construction is the emergence of a mortgage credit system.
For first time installations: demand for new gas equipment in regions with gasification programmes. There is also huge demand for housing renovation which often involves first time installation of central heating products, including conversions from district heating system.
For replacement: rising spending power of the population and years of frustrated demand, built up during the deficit economy of the 1980's and economic stagnation of the 1990's. In particular there is large park of low quality gas boilers in need of replacement.
BSRIAs World Market for Heating will be completed in March 2006, covering key product markets in detail in 39 countries worldwide including market size, structure, trends and forecasts, major players and market forces. For further information contact BSRIA:
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