Excavator is still promising in the future

Data from the China Construction Machinery Industry Association Excavation Machinery Subcommittee in late September showed that sales of excavator industry in China have been negative growth for 15 consecutive months as of August this year. At present, the market situation is still uncertain.

In order to deal with the problems and difficulties encountered in the current downturn of the industry, a 2012 annual excavator annual meeting was held in Wujin, Jiangsu. The theme of the conference was "Rational development, the only path to sustainable growth."

Zeng Guang'an, Chairman of the China Construction Machinery Industry Association Mining Machinery Branch, Li Hongbao, Secretary General of the Mining Machinery Branch, Xinchen Hua, Deputy Director of the Machinery Division of the Equipment Division of the Ministry of Industry and Information Technology, etc., and representatives from more than 300 excavator manufacturers, agents and media from across the country To discuss the development status and expectations of the excavator industry in China.

Decline in sales volume continues to increase

According to the data provided by the excavator branch, Chinese excavators accumulated a total of 90073 hydraulic excavator products from 28 host manufacturers from January to August this year, a decrease of 36.2% over the same period of last year. In the first quarter, a total of 44,166 units were sold, in the second quarter, 34,526 units were sold, and in the third quarter, 7,381 units were sold in July and August. The declines in the three quarters were 5.4%, 30.6%, and 35.7% year-on-year, respectively, and the decline was continuously expanding.

From 2009 to the first half of 2011, the excavator industry experienced a rapid growth under the stimulation of the country’s 4 trillion yuan investment. The industry is in an overall expansion period, with rapid growth of total assets and sales growth year after year. However, sudden changes such as the global financial crisis have caused China's economic growth to gradually shift from relying on investment to relying on domestic demand. In this environment, the domestic excavator market is also affected. Among major excavator manufacturers, Japanese brands achieved sales of 21,865 units in January-August this year, a year-on-year decrease of 48.8%; Korean brands achieved sales of 14,475 units, a year-on-year decrease of 48.6%; European and American brands achieved sales of 11,814 units, a year-on-year decrease of 32.4. %; The sales volume of domestic brands was 41,919, a year-on-year decrease of 20.5%.

At the same time, the potential problems during the period of rapid development are gradually exposed. The credit risk of customers arising from redundant construction, market saturation, overcapacity, over-relaxed sales policies, over-reliance on corporate cash flow problems caused by financial leverage, irrational competition-induced decline in industry profits, and the need to adjust product structures, etc. The problems are presented one by one.

Industry growth has momentum

For the excavator industry, this year is a complicated year. After undergoing a series of changes, the industry will recover next year. Specifically, when the government is re-elected, the macro-control will enter the second half of the year. Some of the production capacity for the first two years will be released in concentration next year. The further launch of the 12th Five-Year Plan will inject momentum into economic growth.

Since the beginning of this year, the central government has lowered its GDP growth forecast. Currently, the target for setting growth is 7.5%. Given China's economic aggregate, this seemingly low growth figure is still quite substantial for the actual increase in the market. Zhang Liqun, director of the Development Research Center of the State Council, said that in 2011, China’s macroeconomic policies had basically completed the transition from crisis response mode to conventional mode. In the third quarter of this year, China's economic GDP growth rate was 7.4%. The Chinese economy has already bottomed out. The possibility of infrastructure investment, real estate investment, and manufacturing investment continuing to stabilise will further increase. These undoubtedly provide a good macro environment for the recovery of the excavator industry.

Microscopically, in terms of transportation, the Ministry of Communications plans to increase the total length of roads in the country from 2011 to 2015 by 500,000 kilometers, and the proportion of planned roads will also be upgraded. For water conservancy, the total investment during the 12th Five-Year Plan period will be 180 million yuan, the key projects such as the South-to-North Water Transfer Project will continue to be carried out; on the aspect of coal, experts expect that the national coal demand will reach 4.3 billion tons by 2015, with an average annual consumption of 5.2%, and the construction of the mine will be further strengthened; the airport, 2015 Before the whole country will build 56 airports, relocate 16 buildings, expand and expand 91 buildings, with an investment of 425 billion yuan. In urban construction, the country expects that the urbanization level will reach 60% by 2020, which means that there will be more than that. 100 million rural people flooded into cities, thus driving 6.6 trillion yuan of investment. All these have created conditions for the recovery of the excavator industry.

In summary, although the current excavator industry's growth rate has been slowed down due to the decline in real estate, the recovery of other industries still provides sufficient momentum for the development of the industry.

Future market is still promising

At the annual meeting, the branch forecasted that the annual sales of excavators this year would be 113,000 units, 13.3 million units in 2013, and 150,000 units in 2015. The excavator market will further increase the proportion of the entire construction machinery market. At present, China's excavator industry accounted for only 19% of the construction machinery industry, compared to 50% of mature markets in Europe, America, Japan, etc., the future of China's excavator market is still promising.

As an investment-driven industry, excavators need more leverage from industry stakeholders. Judging from the development of the excavator industry, the intensified competition will be the most obvious trend in the industry. The overall profitability of the excavator industry is gradually lower, and the industry needs rational development and healthy competition. In this regard, Li Hongbao stated at the meeting that “should limit” Zero down payment, group purchase, trade-in and other disguised price reduction policies to promote rational competition in the industry."

In the future, the concentration of the excavator industry will also increase further. The industry differentiation will further expand, the elimination rate of enterprises will increase, and the industry structure will not be formed yet. Under such circumstances, leading enterprises in the industry will exert their own competitive advantages in profitability, financing capacity, sales system, and services, and promote industry concentration. Promote.

The regionalization of the excavator industry will also be strengthened. Industrial cluster development will become an important form for the development of the excavator industry. Relevant parts and components industries such as engines, hydraulic components, and electrical components will also be further concentrated with the cluster development of the host plant, and the development potential is huge.

Xin Chenhua, Director of the Machinery Division of the Equipment Division of the Ministry of Industry and Information Technology, believes that one of the goals of the “12th Five-Year Plan” period is to build a strong manufacturing equipment manufacturing industry. This is the responsibility that all machinery industries, including the excavation machinery industry, must shoulder. In order to achieve the long-term development of the excavator industry, it is necessary to promote the construction of a technological innovation system that focuses on enterprises, increase the research and development of key technologies and common technologies, and increase personnel training so as to promote the rational and sustainable development of the industry.