As soon as the excavator rang, gold was ten thousand taels. If the construction machinery industry is the "vane" of macroeconomic development, then excavators, the "jewel in the crown of construction machinery", can more intuitively reflect the heat of investment and the temperature of economic development.
On December 8, the 2020 China Construction Machinery Industry Association Excavating Machinery Branch and Industrial Internet Branch Annual Meeting, co-organized by Sunward Intelligent, was held in Changsha. Many "big guys" gathered together to discuss the industry development and when it might usher in "Cooling", how companies deal with industry hotspots and pain points such as cycle risks.
Market recovery exceeds expectations, excavator sales hit a record high
Since the stabilization and recovery in 2016, the high growth of the construction machinery industry has continued for 5 years, and the performance this year is particularly impressive. From January to November, the sales volume of China's excavator market exceeded 296,000 units, a year-on-year increase of 37.4%, far exceeding the sales volume of last year and setting a new record high.
"Since March this year, the domestic market has continuously set a single-month historical sales record for the same period. The market recovery has far exceeded industry expectations." According to Wu Peiguo, Secretary-General of China Construction Machinery Industry Association, the market continued to grow beyond expectations for many years. It is caused by the superposition of the update cycle and inventory cycle.
The industry boom continues, and the development of the Hunan construction machinery industry is remarkable.
From January to September this year, the province's construction machinery industry completed operating income and profits of 179.5 billion yuan and 24.46 billion yuan, an increase of 45.3% and 46.2% year-on-year, respectively. The major economic indicators of the industry are at the highest level in history. Changsha, which has four "Global 50 Construction Machinery Companies", Sany Group, Zoomlion, China Railway Construction Heavy Industry and Sunward Intelligent, has achieved remarkable industry development. In 2019, its total output value exceeded 200 billion yuan for the first time, becoming the third largest in the world Construction machinery industry cluster.
How long can the industry boom last? Most industry experts are happy to watch the development in the next few years.
Wu Peiguo predicts that the construction machinery market demand will maintain a single-digit growth rate in 2021, and the market's new and updated demand will play a role together.
"Under the long-term perspective, the continuous and healthy development of the mining machinery industry has a good market demand and policy environment background." He Qinghua, chairman of Sunward Intelligent, said frankly, but the next few years will not continue to grow as high as it is now, and the probability is stable. The momentum of growth.
Opportunities and risks coexist, companies need to remain calm and rational
"When the market is prosperous, sales are increasing, and the stock market is rising, everything is good, and it is also the time when risks accumulate." The speech by Xiang Wenbo, President of Sany Heavy Industry, was endorsed by many participants.
The data shows that with the market's exceeding-expected growth, the overall planned production capacity of the industry has expanded significantly. According to the association's investigation, the production capacity of excavators in China has reached approximately 600,000 units, far exceeding market demand.
"The rapid expansion of production capacity should attract enough attention from the industry!" Li Hongbao, executive vice chairman and secretary general of the Excavating Machinery Branch of China Construction Machinery Industry Association, called on companies to remain calm and rational at this time and not to repeat the same mistakes.
The excavation machinery market is a highly cyclical industry, experiencing a short cycle approximately every 3 to 4 years, a medium cycle every 10 years, and a long cycle every 20 years. Many people in the industry recalled the cliff-like decline of the industry in 2012, but still have lingering fears.
Xiang Wenbo said that if companies engage in a price war at this time, they will collectively run wild on the road to death.
He Qinghua emphasized that enterprise risk control cannot be relaxed for a moment.
How to traverse the cycle? International giants such as Caterpillar and Komatsu have been in development for nearly a hundred years. They have repeatedly crossed the market cycle and continued to grow. Their research and judgment on the industry context, grasp of technology trends, and optimization of business management strategies are worth learning from domestic companies.
Caterpillar global vice president Chen Qihua said that the core of the cycle is to maintain sufficient competitiveness and profitability under different market conditions, maintain sufficient cash flow during the trough period, and accumulate power for industry recovery. "Make a low-down plan during the booming period of the industry, and always prepare for the low-down period. Companies must continue to expand their product lines, fully meet the diverse needs of customers, drive service upgrades through digitalization, and perform excellent operations to maintain profitable growth."
Leading companies focus on the mainstream market, SMEs "intensive cultivation" sub-fields, differentiated competition is the way out
In 1999, there was only XCMG in China among the "Top 50 Construction Machinery in the World"; today, there are 12 companies on the list in China, and there are only 4 in Changsha.
Some industry insiders describe the changes in the excavator market pattern as: Chinese construction machinery manufacturers have changed from "opposition parties" to "ruling parties."
"At international large-scale exhibitions, Chinese products have a pivotal position and won the respect and praise of domestic and foreign merchants and peers." Huang Min, chairman of the mining machinery branch of China Construction Machinery Industry Association, mentioned that the hardworking spirit of Hunan construction machinery enterprises is a model of the industry. .
Since 2012, the industry has completed “de-capacity and corporate transformation and mergers and reorganizations in the market decline, and market concentration has risen steadily. In the growth market that began in 2016, leading companies have rapidly occupied the market with all-round advantages and market concentration. Significantly increased.
How will the future market competition pattern change?
Li Hongbao, executive vice president and secretary-general of China Construction Machinery Industry Association Excavating Machinery Branch, analyzed that the market structure of excavation machinery continued to be adjusted in depth. Under the background of industry growth, some enterprises had weak growth and their market share declined; one of the leading enterprises in the industry There has also been a divergence between the domestic brands and the overall growth of domestic brands, while the growth of foreign brands has been relatively slow or even declined.
Long Hui, chairman of Jiangsu Lihao Construction Machinery Co., Ltd., believes that in the future, construction machinery leading companies will focus on the mainstream market, and small and medium-sized enterprises or "unicorn" companies will intensively cultivate subdivision fields, and differentiated competition will make the industry more healthy and long-term development. Artificial replacement and the international circulation of new and old equipment will be the outlet for new high sales of construction machinery in the next decade.
