In the first half of 2020, "super compensation rebound" is the key word of the construction machinery industry. Driven by the multi-pronged approach of resuming production, traditional infrastructure and new infrastructure, some models of the construction machinery industry continue to operate at a high level, and the industry's "super-compensation rebound" effect continues to be released. In the second half of the year, how will the construction machinery market trend change? China Pavement Machinery Network interviewed high-level industry representatives from mainframe manufacturers and some agents (Remarks: Dialogue characters are sorted by surname strokes). The following is sorted out, hoping to gain insight into market changes from their perspectives.
Earth-moving machinery
Shan Yu Construction Machinery Co., Ltd. Marketing Director Men Yubiao
In the second half of 2020, the development of the construction machinery industry is basically oriented towards a good posture. From the perspective of the domestic macro market, the fiscal deficit scale increased by 1 trillion yuan compared with last year, and a series of monetary and fiscal measures such as the issuance of 1 trillion special anti-epidemic government bonds, as well as key support for both promotional expenses, people's livelihood, structural adjustment, and growth The "two new and one heavy" construction, newly added special debt is mainly used in the field of infrastructure, and the counter-cyclical adjustment policy continues to support the continued prosperity of the industry. It is expected that domestic market industry demand will still be guaranteed in the second half of the year. Affected by the uncertainty of the overseas epidemic situation, the construction machinery export market is expected to be lower than expected in the second half of the year.
Wang Bin, General Manager of Lovol Construction Machinery Group
After the rapid growth in the first half of the year, the growth rate of the excavator market may slow down in the second half of the year, but it will still maintain a high operating trend. Due to the increasing concentration of loader applications, and many application scenarios have been replaced by excavators, it is unlikely that there will be ups and downs. The loader is expected to decline slightly throughout the year.
Since most of the projects started in the first half of the year were major projects involving people's livelihood, the project schedule and funds were controlled relatively well. In the second half of the year, in order to ensure economic development, the state will further increase investment in infrastructure construction. In addition, in order to meet the needs of the owners, the update rate of the equipment is accelerating, and many old equipment will withdraw from the market at an accelerated pace, which is a new growth point.
Shandong Shengong Deputy General Manager, General Manager of Marketing Company
The loader is expected to be basically the same in the first half and the second half, with a slight increase throughout the year. According to the growth rate in the first half of this year, excavator sales are expected to exceed 250,000 units this year, setting a new historical record again.
According to the past practice, the first half of the year was mainly for major projects related to people's livelihood. A large number of farmland water conservancy and other projects are expected to be concentrated in the second half of the year. In the first half of the country, most of the energy will be used for epidemic prevention and control. Not started; as the epidemic stabilizes in the second half of the year, the country will inevitably increase the intensity of infrastructure investment in these regions to ensure stable economic growth.
Assistant General Manager of XCMG Excavating Machinery Division, General Manager of Marketing Company Zhang Fengting
In the first half of the year, the excavator maintained a high level of operation, and it should maintain a certain growth in the second half of the year. There are two main reasons for this. First, because of the impact of the epidemic situation and the weather, many projects have not been started in the first half of the year, and the second half of the year will usher in a concentrated outbreak period; the second is that the update cycle of old equipment is shortening, and there are still many Big room for growth. In addition, despite the rapid growth of the market, the risks of various companies are now relatively well controlled, which has laid the foundation for continued growth in the later period.
Chairman of Yuchai Heavy Industry Yan Maolin
In the second half of the year, excavators will continue to maintain a high level of operation, and annual sales are expected to reach about 250,000 to 260,000 units.
The main reasons are as follows: First, the country’s focus in the first half of the year was on epidemic prevention and control and the restoration of basic livelihoods. Although a large number of policies were introduced, these policies will really be implemented in the second half of the year; In the stagnation or damage state, after the flood, these batches of projects will start one after another; the third is affected by the global epidemic in the first half of the year, and the export market will have a greater impact. With the improvement of the prevention and control situation in the second half of the year, the export market should recover. Fourth, although the implementation time of National IV emissions has been delayed, most manufacturers have made corresponding preparations to respond to National IV emissions. Putting the product on the market will release some sales.
General Manager of Zoomlion North China Region, Deputy General Manager of Zoomlion Earthworks Marketing Company
With the increase in infrastructure investment and the implementation of various policies, I think the excavator is expected to usher in continuous growth in the second half of the year. The basis is that, first of all, since this year, the country has issued a total of 1.848 trillion yuan in new local debt limits in advance in 2020, and the third batch of local special debt is close to 1 trillion yuan. The current macroeconomic and monetary policies continue to be loose; secondly, after the "two sessions", new construction projects are expected to be gradually launched this year, and the domestic excavator market is expected to appear in the third quarter of the "off-season is not weak" situation; again, the replacement of old and new machines Demand has injected additional driving force into the consumption of new machines in the excavator industry. In addition, the superimposed effect of the epidemic situation and the weather has amplified the demand for equipment from the owners. The existing equipment is difficult to meet the needs of many construction sites to start construction intensively.
Zhou Jieqi, Deputy General Manager of Shanhe Intelligent Excavator Division
Based on the situation in all aspects, the excavator industry will still maintain an upward trend in the next year, and it is expected that the industry inflection point will only appear in the second half of next year. The basis for this judgment is that the current operating rate of the market is very high, and the second mobile phone trading market is also relatively active, which shows that there is no sign of a decline in the current engineering volume. The policy dividend issued by the state to stimulate a new round of economic growth may continue into the first half of next year.
Yuan Yue, General Manager of Sany Heavy Machinery Marketing Company
The sales volume of excavators in the first half of the year has exceeded 150,000 units, and will increase slightly in the second half of the year compared with last year.
There are two main reasons for this: First, the impact of the epidemic in the first half of the year, many projects have not yet started, and there is still much room for market demand to release; second, from the current point of view, infrastructure investment remains high. The export market in the first half of the year was greatly affected by the global epidemic. In the second half of the year, with the improvement of the global epidemic situation, the export market should be able to recover. This is also a beneficial supplement to the domestic excavator market.
Road Machinery
Wang Feng, Deputy General Manager of Xugong Road Machinery Division
In the first half of this year, XCMG Road continued to maintain a rapid growth momentum, and I think it will continue to rise in the second half of the year. The basis is as follows: First, from a macro perspective, affected by the epidemic, infrastructure as the main means of stimulating the economy will only strengthen and not weaken. As a useful supplement to traditional infrastructure, the new infrastructure has driven the healthy development of the market. Second, the industry is becoming more and more concentrated, and the top-ranked companies will gain more resources and market share.
Han Bin, General Manager of Dynapac (China) Compaction and Paving Equipment Co., Ltd.
In the first half of the year, the pavement and compaction machinery sector continued to develop. Since June, we have felt the upward trend. Pavement and compaction machinery are expected to continue to grow in the second half of the year.
From a macro perspective, 2017 is the peak of the development of the road machinery industry. The industry has been in a downward trend for the next three years. In 2020, affected by the epidemic, it has basically bottomed out. From the perspective of the economic development cycle, 2020 may be an inflection point for the development of the industry. The state has invested a lot of money in infrastructure such as roads and has issued a series of preferential policies. From a microscopic point of view, the recent flood disasters in the middle and lower reaches of the Yangtze River have damaged a large number of roads, and many urban underground drainage projects require large amounts of capital. In addition, this year is the "13th Five-Year Plan" national inspection year, large projects are still continuing to increase, "white to black" project is still in progress... Based on these factors, I think the development of the road machinery market in the second half of the year is more optimistic.
Tan Zuozhou, General Manager of Liugong Wuxi Pavement Machinery Co., Ltd.
In the first half of this year, Liugong road rollers increased by more than 50%. In the second half of the year, they will continue to rely on the Group's strong R&D and brand advantages to promote the rapid growth of the road roller sector. August and September are the peak season for road construction. As a large number of projects are concentrated, a new round of growth will surely be ushered in. In addition, the owner hopes to use newer and better equipment to participate in the construction, which will accelerate the replacement of old equipment and bring more opportunities for new machine sales. Pavement damage caused by heavy rain and underground drainage in urban areas are also the focus of construction in the second half of the year.
Agent articles
Chairman of Shandong Yahua Construction Machinery Co., Ltd. Wang Jiangang
Excavator sales will continue to grow in the second half of the year, but there will not be such a high growth rate. It is expected that there will be a 15% increase in the second half of the year compared with last year. This is based on a macro perspective: on the one hand, to deal with the impact of the epidemic, governments at all levels continue to increase investment in infrastructure and bring about equipment procurement needs; on the other hand, there is room for updating old excavators brought by the continued strict implementation of environmental protection policies in various regions.
Wang Hui, General Manager of Hunan Xiangsong Construction Machinery Co., Ltd.
Judging from the current market situation, it is believed that the excavator market in Hunan will grow in the second half of the year, with an increase of about 15%, and the increase of joint venture brands is about 15-20%. Looking at the reasons, first of all, affected by the epidemic, the state will continue to increase investment in infrastructure to stimulate the economy. In addition, part of the national key projects in the first half of the year have not been started. It is expected to start in the second half of the year or next year, which will promote the rise in excavator sales. In addition, with the tightening of national environmental protection policies, a large number of high-emission equipment needs to be updated. These are the factors driving the high growth of the industry. It is expected that the high growth momentum of the excavator market will remain for about two years.
Chairman of Wuhan Maxima Group Yang Yihua
I think the excavator market in the second half of the year will maintain a relatively high growth trend, because the country's new infrastructure investment has just begun, and large-scale investment has not yet started. In the first half of the year, sales of excavators have exceeded 150,000 units, and sales in the second half of the year are expected to account for about 40% of the year. The sales volume for next year may be affected. The next step depends on the national environmental protection policy, the investment in the field of rural construction, and the degree of cooperation of local governments in construction investment. This round of excavators is growing rapidly, and the quality of users entering the industry is better than before. The reason is that manufacturers and agents are strengthening debt control and risk control. Users also have a strong sense of risk when buying equipment and will not be easily interfered by low-cost competition.
As the state is advocating the construction of a credit society, the construction unit's arrears are gradually reduced in terms of construction payment, which is also conducive to the stable and continuous guarantee of repayment of equipment loans for excavator users. As for the Hubei market, the demonstration and establishment of infrastructure projects will take some time. Although the state has given relevant policy support, the Hubei market has not yet started on a large scale. At present, the middle and lower reaches of the Yangtze River are entering the flood season, and Hubei and other places are in flood control. It is expected that the excavator market in the second half of the year will also improve due to the repair and construction of water conservancy facilities and the construction of underground pipe corridors.
Zhou Chijun, Chairman of Xiangyuan Group
I think the excavator market will still be very hot in the second half of the year, and the sales of excavators are expected to increase by more than 50% year-on-year.
Cao Weiguo, Chairman of Zhejiang Liyang Machinery Co., Ltd.
I think the growth rate of the excavator industry will slow down in the second half of this year and will show an upward trend throughout the year, but I still think that the high growth of the excavator is not sustainable. The reason is that the excavator industry has continued to grow for four years. The pneumonia epidemic and the Sino-US trade war have prompted the country to continuously increase investment in infrastructure and implement many projects in advance to ensure domestic demand and boost the economy. In addition, in the past two years, competition in the excavator industry has intensified. Manufacturers have lowered the threshold for purchasing machines, which has driven a group of people with low purchasing power to enter the industry, and overdrawn some market demand in advance. The high growth of the entire excavator industry is now worrying, just like driving a car at 180 mph at high speed. Although excavator sales have increased significantly, the profit situation is not optimistic. In particular, the price of small and medium-sized mining products is too low, and it is expected that the situation will improve in the second half of the year. For various agents, it is difficult to handle this situation of more sales and more losses.
As far as the region of Zhejiang Province is concerned, the demand for equipment is relatively strong this year. The Asian Games will be held in Zhejiang in 2022. There are many related stadium constructions and supporting projects, which have led to a surge in excavator sales in Zhejiang Province and ranking in the national excavator ranking. It has risen from the previous 20 to the top 10. Zhejiang Liyang also achieved sales growth of 100% in the first half of the year. Although the growth rate is up, we are cautiously optimistic about the industry trend in the second half of the year.
General Manager of Gansu Ruiyuan Liugong Machinery Equipment Co., Ltd. Liao Rongguo
More optimistic about the development of the industry in the second half of the year. Judging from the following factors: First, from the perspective of May-June sales of excavators, this situation will continue to increase substantially year-on-year, and secondly, due to the impact of the new coronary pneumonia epidemic, the country will continue to increase infrastructure investment in the second half of the year. Maintain economic growth; in addition, after the two sessions, the financing policy is relatively loose, so the infrastructure projects that can be started in the second half of the year will increase. In terms of local conditions, the annual sales volume of excavator products in Gansu Province is expected to increase by about 20%. The total amount of infrastructure projects in Gansu Province is very large. Due to the impact of funds and epidemic conditions, the operating rate has been suppressed to a certain extent. As the situation improves in the second half of the year, the state continues to increase investment in western provinces, funds are in place, and the project will start construction on a large scale, which will have a significant pulling effect on the demand for construction machinery.
Postscript: From the perspective of the above guests, the high growth of the industry in 2020 has been recognized by most. In the first quarter, all countries pressed the pause button to fight the epidemic across the country and won a decisive victory in Wuhan. With the effective control of the epidemic situation, comprehensively promoting the resumption of production and production has become the main theme of China's social development. The new infrastructure and the overhaul of major livelihood projects have provided a useful place for my country's construction machinery industry, and the industry is booming. As some guests said, the rapid growth of excavators has been for four years, can it continue? Standing at the node in mid-2020, how to move towards the second half of the year is a topic of particular concern to the industry, and after China achieved a critical victory in the fight against epidemics, the implementation of policies such as "six stability and six guarantees" also brought to the construction machinery industry. Space for continuous development. From the dialogue, we can also see that high growth cannot be at the expense of the industry. A good and healthy living environment is the result of a five-year downturn in our entire industry. The cost is huge. Nowadays, industry colleagues are required to carefully protect the hard-won market environment.
