On November 7, the China Construction Machinery Industry Association released the sales bulletin of major products in the construction machinery industry in October 2022. According to the association's statistics on 26 excavator manufacturers, 20,501 excavators of various types were sold in October, a year-on-year increase of 8.1%.
Driven by the policy of stabilizing growth, the operating rate of domestic infrastructure construction has rebounded, coupled with the increase in demand in the international market, after entering the third quarter, sales of construction machinery in my country have resumed positive growth. In an exclusive interview with our reporter, Lu Ying, deputy secretary-general of the China Construction Machinery Industry Association, said that in the past four months, the sales data of the construction machinery industry has gradually improved, and the domestic construction machinery industry chain has further strengthened the supporting role of the world construction machinery industry chain. Looking forward to the fourth quarter, the construction machinery industry is expected to continue to recover, but it remains to be seen whether an inflection point has been formed.
Part.1The market gradually picks up
In the first half of this year, due to the downward impact of infrastructure construction, the demand for construction machinery such as excavators was under short-term pressure. But after entering the third quarter, there was a marginal improvement.
In October, the China Construction Machinery Industry Association counted 26 excavator manufacturers, and sold 20,501 excavators of various types, a year-on-year increase of 8.1%, of which 11,350 were domestic, a year-on-year decrease of 9.91%; exports were 9,151 units, a year-on-year increase of 43.8%. Statistics from 22 loader manufacturers show that in October 2022, 9,448 loaders of various types will be sold, a year-on-year increase of 1.85%. Among them, the domestic market sales volume was 6,304 units, a year-on-year decrease of 5.98%; the export sales volume was 3,144 units, a year-on-year increase of 22.3%.
"Construction machinery has resumed positive growth, driven by multiple factors, among which the national policy of stabilizing growth has played a big role." Lu Ying said that since the beginning of this year, the country has issued policies for stabilizing growth many times, which have formed a key supporting role in promoting the development of the entire industry
From the perspective of the supply side, the upstream of the construction machinery industry mainly includes raw materials and core components such as steel, hydraulic parts, and engines. Price fluctuations of raw materials such as steel directly affect the production cost of construction machinery. In the first half of the year, the overall price of steel showed a development trend of "rising and falling", which will help improve the efficiency of construction machinery manufacturing enterprises and increase the enthusiasm of enterprises for production.
From the perspective of demand, the construction machinery industry is greatly affected by downstream infrastructure construction, real estate construction, and coal mining. In the first half of the year, many projects were postponed due to factors such as frequent outbreaks of the new crown pneumonia epidemic and high temperature and power cuts in many places.
After entering the third quarter, various infrastructure investments in my country accelerated. The "CCTV Finance and Economics Excavator Index" jointly created by CCTV Finance, Sany Heavy Industry and Shugen Internet shows that the operating rate of various types of machinery and equipment remained at a high level in the third quarter, and the average monthly operating rate of construction machinery in the third quarter was 64.76%, which was higher than the first The quarterly monthly average operating rate was 53.98%.
"After entering the second half of the year, many companies began to catch up with the construction period to ensure the completion of the annual construction progress." Yuan Xuezheng, a researcher at Jigong Think Tank, said that although the external environment of construction machinery this year is not as good as last year, there are still some positive factors. For example, the investment in the electromechanical industry is expanding, the demand in overseas markets is increasing, and the demand for upgrading brought about by environmental protection and technology has all driven the sales of construction machinery
Part.2Export sales exceed domestic sales
On October 25, Sany Heavy Industry announced that from January to September, the company achieved international sales revenue of 25.88 billion yuan, a substantial increase of 43.7% year-on-year, 10.8 percentage points faster than the first half of the year. Among them, the Asia-Australia region achieved sales revenue of 11.595 billion yuan, an increase of 52.3%; the European region achieved sales revenue of 7.517 billion yuan, an increase of 26.5%; the Americas region achieved sales revenue of 4.846 billion yuan, an increase of 63.5%; the African region achieved sales revenue of 1.92 billion yuan , an increase of 29%.
The person in charge of Sany Heavy Industry told reporters that the global market share of Sany excavating machinery has increased rapidly, and its overseas market share has exceeded 8%; in overseas excavating machinery markets such as the United States, Britain, Italy, Brazil, and Canada, sales revenue has achieved more than 60% of rapid growth.
Xugong Machinery, another leading construction machinery company, also adheres to the internationalization strategy. XCMG's various products are sold in a wide range of global exports, and international revenue accounts for more than 50%.
"The international market share of domestic construction machinery companies has increased a lot compared to two years ago." Yuan Xuezheng also said that when domestic demand is not particularly prosperous, exports have largely smoothed the domestic cycle.
Since the third quarter, construction machinery as a whole has been able to return to positive growth, and export growth has indeed played an important role. In the first nine months of this year, my country's export sales of excavators were 80,000 units, a year-on-year increase of 70.5%. Among them, the export sales of excavators in September surpassed domestic sales for the first time, accounting for 50.35%.
"Exports have exceeded domestic sales, which has not happened for many years." Lu Ying said that according to customs statistics, the export volume of construction machinery in July, August and September this year continued to exceed US$4 billion.
In the past, there was a strong brand inertia in the international construction machinery market. International brands had been deeply cultivated in some regional markets for many years, and it was difficult for domestic enterprises to enter the main market. But this pattern is changing. At present, many foreign construction machinery companies are facing problems such as uncontrollable production costs, incomplete industrial chains, long supply cycles, and difficult shipments. The product supply has been greatly reduced, giving Chinese construction machinery companies the opportunity to expand the international market.
Yuan Xuezheng believes that the demand in foreign markets does exist, but the export growth is mainly due to the active layout of domestic leading enterprises in technology research and development, industrial chain and international market. my country's construction machinery companies have advantages in electrification and digitalization, strong industrial resilience, and high cost-effective products, effectively seizing the opportunity to enter the international market.
"The domestic industry chain plays a prominent role in supporting the international construction machinery industry chain." Lu Ying said that the increase in export volume is not only for complete machines, but also for parts and components.
Taking Brazil as an example, it ranked in the top ten in my country's construction machinery export market in the past, and entered the top ten in the third quarter. Nearly half of its imported construction machinery products are parts. The "whole" and "zero" exports have enabled domestic construction machinery companies to achieve leapfrog development in non-traditional advantageous markets.
Lu Ying said that if the export volume of domestic construction machinery can achieve continuous growth, it will promote the reconstruction of the entire international market structure of construction machinery.
Part.3expected to grow steadily
On November 4th, Liugong's "National IV" full series of products were unveiled at the Liugong Huazhong Industrial Base Project Commencement Ceremony and Liugong Comprehensive Solution Conference. According to reports, at present, Liugong has 28 types of loaders, 31 types of excavators, more than 10 types of bulldozers, graders and other construction machinery and equipment that have completed the "National IV" environmental protection filing.
From December 1st, the construction machinery industry will officially enter the era of "National IV" emission standards. How will it affect the sales of construction machinery industry in the short term?
"Although the previous two emission standard upgrades did bring about large fluctuations, this time it may not be." Lu Ying said that the entire market's expectations for environmental protection emission upgrades have changed, and the impact of the new emission standards may not be great.
Talking about the trend of electrification and intelligence of construction machinery, Lu Ying believes that my country has great advantages in related fields. But in the long run, there are still some technical and service difficulties that need to be overcome. In the future, with the accumulation of enterprise technology, electric construction machinery is expected to achieve accelerated development in the next 2 to 4 years.
Looking ahead, construction machinery is a strong cyclical industry. Does this round of performance recovery mean that the cycle has gradually bottomed out?
"The situation of the entire construction machinery industry is improving, but the specific extent of improvement still needs further observation." Yuan Xuezheng believes that the domestic market and the international market are currently in different industry cycles, and the main role of exports is through the international market. To smooth the domestic cycle, the share of China's construction machinery in the global market will continue to increase in the future. At the same time, as the industry bottoms out, the sales volume of the construction machinery industry will usher in a rebound. Domestic demand still exists, and it is still unknown whether exports will become the main support in the future. It is believed that with the gradual expansion of Chinese equipment and the continuous expansion of overseas markets, the pattern of two major domestic and international markets will gradually be established.
Lu Ying said bluntly that it is unlikely that there will be new drastic changes in sales in the fourth quarter. Although the sales of some products may show recovery growth, the volume will not be too large. In terms of export, enterprises should be wary of the adverse impact of the recent sharp US interest rate hikes on some countries to the demand for construction machinery. They should combine the new changes that have emerged after the recovery of the domestic market, comprehensively study and judge, and rationally adjust production capacity.
