How China's Excavators Go after the Economic Crisis Era

At the 15th annual meeting of China's excavation machinery industry held recently, participating companies and industry experts reviewed and analyzed the Chinese excavator market in 2011, and revolved around the “post-economic crisis era, development opportunities and challenges of the Chinese excavator industry”. Other issues were discussed. According to the statistical analysis of the industry data in the first three quarters of 2011 of the China Construction Machinery Industry Association Mining Machinery Subsidiary Secretariat, the 25 mainframe manufacturing companies included in the statistics accumulated a total of 149,931 units of hydraulic excavator products in the first three quarters of 2011, which was the same period in 2010. This is an increase of 19.34%.

The foreign brand encountered the gradual rise of the national brand. According to reports, there was a gradient of quality in the excavator market. The quality of the products of the American and Japanese companies was the best. The quality of the Korean brand ranked in the midstream, and the domestic brands once lingered at the bottom. It is for this reason that foreign brands have dominated the market for a long time. However, this pattern is quietly changing at present, and the total market share of Chinese companies is constantly increasing. According to statistics from the excavator branch of the China Construction Machinery Industry Association, 3209 sets of excavators were exported in the first three quarters of last year, a year-on-year increase of 63.39%. Export sales have already surpassed the sales volume for the whole year of 2010. Only from the data point of view, far more than the total sales volume. Increase. In the first quarter, 903 units were exported, an increase of 114.49% year-on-year; in the second quarter, 1,165 units were exported, an increase of 47.10% year-on-year; and 1,141 units were the third quarter, an increase of 21.9% year-on-year. What is even more gratifying is that changes in the market structure have quietly emerged, and foreign brands have continuously given up market share under the “collective cofferdam” of domestic brands. Among the 25 host manufacturers, there are 12 foreign host manufacturers. The largest manufacturer is Komatsu (China) Investment Co., Ltd. In the first three quarters of the tracked excavator manufacturer sales, there were 8 foreign brands. There are 7 domestic brands, and the “reaction to courtesy” has already taken shape. From the market share of various brands that produce and sell excavator products in China, this trend is even more pronounced. Since February 2011, the monthly market share of domestic brand excavators has continued to rise slowly. By September, the domestic brand excavator market share reached 44.74%. The share of European and American brands slowly increased month by month, and the fluctuations were slow. The Korean brand share has been slowly picking up after experiencing a sharp decline in April and May, and it only broke through 18% in September; the Japanese brand appeared in February. After the increase, it has been in a downward trend and fell to 23.27% in September.

According to the statistical data of the excavating machinery branch, foreign brands accounted for 62.20% of the total sales in the first three quarters of 2011, a decrease of 12.67% compared with the same period of last year, of which the Japanese brands declined the most, reaching 7.28%; the Korean brands decreased by 6.3%. The European and American brands did not change significantly over the previous year and only increased by 0.91%.

In stark contrast to the sharp decline in the share of foreign brands, the rise of domestic brands has gradually increased. The domestic excavator market share has increased by 12.67% over the same period of last year, reaching 37.80%. It is understood that Sany Heavy Industry, which currently ranks first in China in terms of capacity for excavators, has reached an annual output of tens of thousands of units, while the industry’s top four production capacity has reached a level of more than 4,000 units per year, and the capacity of other enterprises has been enlarged. It is also quite strong. Even so, last year, the domestic brand excavator's market share averaged between 25% and 30%, which is not high, and it is entirely possible to continue to expand space. In the next stage, the expulsion of domestic brand excavators on the import market and the second mobile phone market share may become the norm.

Product sales continue to fall. Industry problems are exposed. According to the statistics of the first three quarters of 2011, as of the end of September 2011, there are more than 60 companies that manufacture and sell excavation machinery in China. The planned production capacity is about 600,000 units, and the agent 200. A total of nearly 400 different types and specifications of excavator products were produced and sold, and the quality of a single machine was 0.8-390 tons. Among the 25 host manufacturing companies included in the statistics, there were 149,931 hydraulic excavators sold in the first three quarters of 2011, a year-on-year increase of 19.34%. The first quarter of last year continued the high growth trend in 2010 and achieved a high growth rate of 59.80% year-on-year. The second quarter was basically the same as in the same period of 2010. It only increased by 3.05%, and continued to decline in the third quarter, resulting in a negative growth of 17.53%. Due to the credit crunch, investment slowdown, strengthening of the real estate industry's macro-control efforts, and unfavorable factors such as rising domestic and foreign commodity prices, excavator sales have declined quarter by quarter. Under this background, outstanding problems faced by the Chinese excavator industry continue to emerge.

According to Zeng Guangan, president of the China Construction Machinery Industry Association Mining Machinery Branch, driven by the 4 trillion yuan investment from the Chinese government in 2009, the construction machinery industry and the excavator industry have achieved unprecedented rapid development. Under the strong expectations of rapid market growth, blindly Investment and redundant construction have intensified, leading to structural overcapacity and increased pressure on the industry for inventory. At the same time, non-rational sales promotion measures such as zero down payments and disguised price reductions have also exacerbated the market competition environment. Some companies and agents have experienced serious cash flow problems in their finances, and suppliers have a large backlog. Although the market share of local brand excavators has improved in 2011, the level of product technology and quality needs to be improved due to reasons such as repetitive investment, structural overcapacity, dependence on imports of core components, and lack of technical talent. The state of low-level, homogenous and disorderly competition has become increasingly fierce and chaotic. At the same time, the huge amount of domestic excavators and the reduction of engineering projects have led to a significant drop in customer profitability, uneven customer quality, and reduced ability to repay loans, further exacerbating the industry's long-term, healthy and sustainable development. In addition, the problem of imported second-hand excavators continues to plague the industry.

In addition, although the industry has made great progress in data statistics work, there are still some serious problems, such as inaccurate data, false data, poor reporting, and inadequate data security. The existence of these problems has affected the soundness and perfection of industry data statistics work. Distorted data will mislead the entire industry and even the society. The monthly excavator sales data will even affect the capital market and fluctuations in the stock price of the industry.

The future market is still optimistic about the arduous tasks of national brands. In the face of China’s overall economic situation, the industry generally believes that the overall construction plan during the “Twelfth Five-Year Plan” period will be a good information for the domestic excavator industry. Looking at the current development trend, it will be excavated in the next few years. Machine sales are still promising.

Li Hongbao, Secretary General of the China Construction Machinery Industry Association Mining Machinery Branch, stated that the introduction of the "Twelfth Five-Year Plan", the state's increase in infrastructure construction, the start of construction of 10 million security housing units, the commencement of large-scale water conservancy projects, and the tilting of investment by all parties to the west And so on, it provides a new opportunity for the development of the machinery industry. Li Hongbao said that in the future, China's excavator industry will present its perspectives in the areas of service expansion, high-end products, and localization of key components. With the acceleration of urbanization, the vast western undeveloped region will become the largest excavator market in the future. The growth point. At the same time, he also called for excavator machine manufacturers, suppliers, and distributors to jointly discuss issues and strategies for the development of China's excavator industry and measures for corporate innovation. Domestic excavator manufacturers should adhere to independent innovation and increase investment. To improve the core technological level of the whole machine and the core competitiveness of the company, to get rid of the situation in which the core components are subject to human beings, so as to fully cope with the future industry downturn.

Zeng Guangan emphasized that during the “12th Five-Year Plan” period, industrial upgrading and restructuring will be the main national policy for accelerating the transformation of China’s industrial economic development mode. According to the experience of developed countries, industrial upgrading is the theme of the development of the construction machinery manufacturing industry in the middle and late stages of industrialization. The future development of China's mining machinery manufacturing industry should follow the same trajectory. He believes that in the next 10 years, the growth of excavators will tend to be flat, the industry competition will become more fierce, the profitability of manufacturers and agents will gradually decline, cash flow will become the focus of operations, technological innovation will become the mainstream of industry development, and the marketing model will be further As the market evolves, domestic components will make major breakthroughs.

He Qinghua, chairman of the Sanhe Intelligent Equipment Group, stated that since May 2011, the continued rapid growth of the Chinese construction machinery industry has been affected by the international economic situation and the country’s macroeconomic control. The market demand has shrunk and the development prospects have become less clear. It should be said that the explosive growth of the industry in recent years is actually abnormal and unsustainable! He believes that rather than saying that the current industry has encountered "winter", it is better to say that it is a process that returns to normal. Not necessarily a good thing. The development of the enterprise will be mainly driven by the growth of the external market and will mainly rely on the development of internal strength and connotation. The deserted market will calm our minds, take away our impetuousness, calm our mentality, health our body, and will certainly give birth to a more healthy and rational development of the excavator industry, ushering in a true splendor!