Before the Covid-19 pandemic occurred, the consensus observed by the industry is that China's high-altitude equipment market is booming, showing a compound annual growth rate of 60% since 2014.
However, since the world has caused a widespread economic shutdown due to viruses and there are doubts about the demand for construction equipment, and the world is in crisis, what is the development of the high-altitude equipment market now?
Off-Highway Research pointed out in its 2019 report "China's Aerial Work Platform Industry" that China Mobile's Elevating Work Platform (MEWP) sales exceeded 40,000 units in 2018, reflecting exponential growth in just a few years.
The report said: "In the past five years, China's aerial work platform market has grown very strongly, from about 8,600 units in 2014 to 43,570 units in 2018. During 2014-2016, the growth was strong, but in the last two years The annual growth of the market is over 70%. This extraordinary growth is the result of many major equipment manufacturers entering the market for the first time and a solid leasing industry."
According to research, there are now more than 50 OEMs active in China, whether local or international. It has become an important manufacturing center, producing more than 100,000 devices in 2018.
China's demand for high-altitude platforms is expected to continue to grow strongly, although the growth rate will be slightly lower than in recent years, and it is expected to reach 125,000 platforms per year by 2023. But, considering what is happening in the world, what is the situation now? Will MEWP's Chinese market stop growing after the pandemic?
Few people can argue that the world is facing unprecedented conditions now, and no one can predict what they mean for the construction equipment market in the coming months. However, one bright spot is that major U.S. high-altitude equipment manufacturers report that their operations in China have returned to full or near full capacity.
Snorkel CEO Matthew Elvin said that, like most companies, Snorkel was initially affected by the shutdown, and once the restrictions were relaxed, production would decline. He said: "Today, our factory in China has been opened and is operating at full capacity. We have seen customer demand begin to pick up, and businesses across the country are returning to normal operations."
Genie President Matt Fearon raised a similar situation. He said: "Our team in China first faced a pandemic, and in many ways paved the way for how to deal with such large-scale health risks and the resulting business disruption." As the virus spread to all parts of the world, we A process developed by the Chinese team was used to help manage the crisis in the United States and Europe from the beginning to the start-up phase. In addition to our factories in China and our parts and service operations around the world, all Genie manufacturing plants are closed from March 23 to April 13.
"We have used the start-up measures developed by our team in China to start limited production at factories in Redmond and Oklahoma City in the United States. These measures have safely resumed production. We will continue to put the safety of team members first , As our economy picks up, continue to be committed to serving in the community and meeting the needs of our customers."
While the situation continues to change, the Chinese market is entering a recovery process and reopening operations. At the same time, the demand for equipment is continuing its previous development process.
Although scissor lifts still dominate the market, scissor lifts accounted for 88% of annual sales in 2018, but demand in other areas is growing. The preferred choice of scissor lifts is a common result of indoor applications, but the demand for arm lifts is growing.
Snorkel's Elvin said: "Electric scissor lifts are very popular in the Chinese market and the demand for these devices continues to grow. Initially, we saw most of the demand for electric articulated aerial work platforms. The local assembly of the A38E and A46JE models responded. It turns out that these two models are very popular among our customer base, mainly in the rental field. However, with the wide application of aerial vehicles, our customers also Diesel powered boom lifts have been added to its fleet, and we have recently begun assembling our 14 million articulated booms and 18 million telescopic booms for the market."
He added that Snorkel expects that the demand for booms in this market will continue to grow, and as demand grows, the company will assemble more boom models locally. "
Genie's Fearon said that China's demand for aerial work platforms continues to grow. Although the Covid-19 virus caused an eight-week interruption in the Chinese market, it has rebounded steadily as work resumes.
A representative of SingBang commented: "We have a deep understanding of the North American market and local customer needs, which enhances the company's overall responsiveness, enhances its ability to resist risks, and enables the company to be more flexible."
According to the company, Star State is accelerating its global localization plan. All functions of the Star Europe subsidiary in the Netherlands have been localized and are expected to officially begin operations in July this year.
Form a local team with a large number of machines and accessories locally, distributed by Dutch subsidiaries, and provide PDI, after-sales support/training, dealer support, marketing and other functions. The company added: "In the future, we will establish more subsidiaries in key markets."
In Zhejiang Dingli, a representative of the company said: "Zhejiang Dingli's equipment has better performance, but the price is basically the same as that of North American competitors, or even lower."
At present, Zhejiang Dingli has branches in the United States, South Korea, the United Kingdom, Italy and other places. The company's global sales mainly appear in the form of dealers and agents, but in the future, the company revealed that they will increasingly seek online sales. Many companies currently do this.
Because of Covid-19, there are currently many uncertainties in the global market; it changes everyone's business forecast.
Skyjack’s McDougall said: “Before the pandemic, we have stated that we expect market growth to slow down in 2020 and resume in 2021. Covid-19 extended the timetable. We believe that growth in 2021 will be delayed, And with the impact of the Covid-19 effect, it will come from a lower base."
He pointed out that there are many discussions on stimulus plans and incentives, but the question mark focuses on the lagging effect on the recovery curve as the economy opens up.
JLG predicts that 2020 will be a year of slow growth and sales will pick up in 2021. However, JLG President Frank Nerenhausen said that due to the pandemic, the current view is more conservative.
He commented: "Since many workplaces have been closed, the rent utilization rate is lower than our usual annual level. Needless to say, we are closely watching the reopening of construction sites and the resumption of work in the world. We still hope to achieve this in the second half of this year Fast recovery and strong demand."
Elsewhere, Fearon said that many commentators have said: "So far, 2020 has gone through a process that all of us can't imagine, and we don't expect a rapid rebound."
"Outside China, we believe that fleet utilization, rent and value of used equipment will take several quarters to return to a healthy level. China has been rebounding well, but if there is no strong export market, China is likely to There is a situation of oversupply."
Elvin told Snorkel that they expect demand to recover as restrictions are lifted, but it may take some time for businesses to recover.
At this stage, it will usher in a strong third quarter and fourth quarter. However, even if the growth of aerial platforms takes longer than all of its stakeholders, it is certain that China will still be a key market.
