Since the beginning of the year, China's excavator sales have been "hot". With the domestic and global economic recovery, market demand has accelerated. Data show that from January to March this year, 26 excavator manufacturers included in the statistics sold 126,941 excavators, an increase of 85% over the same period last year.
Excavator sales are often regarded as a "barometer" of a country's economic vitality, which confirms that China's economic recovery is better than expected. According to data from the National Bureau of Statistics, China's Manufacturing Purchasing Managers Index (PMI) was 51.9% in March, and the economy has expanded further than the previous month.
The International Monetary Fund’s "World Economic Outlook Report" recently announced that China’s economy will grow by 8.4% this year, an increase of 0.3 percentage points from the January forecast.
According to industry insiders, the hot sales of excavators strongly reflect the current strong demand for construction machinery and the increase in macroeconomic vitality in the first quarter. Gao Ruidong, chief macro economist at Everbright Securities, said: "In the second quarter, infrastructure growth is expected to rebound, supporting the continued strong economic recovery."
Growing market
Su Zimeng, president of the China Construction Machinery Industry Association, believes that behind the huge increase in excavator sales are China's huge economic development space and huge infrastructure construction scale.
He said that under the coordinated development of Beijing-Tianjin-Hebei, the construction of the Yangtze River Economic Belt, the construction of the Guangdong-Hong Kong-Macao Greater Bay Area, the Western Development, and the revitalization of the Northeast, the domestic market still has considerable demand for infrastructure construction.
Official statistics show that from January to February, investment in infrastructure and manufacturing increased by 36.6% and 37.3% year-on-year, respectively.
At the same time, China has been strengthening policy and financial support for new infrastructure, and the "14th Five-Year Plan" outlines the construction of new infrastructure as the focus of expanding investment space.
"From 5G big data centers, urban rail transit and other new infrastructure construction to people's livelihood protection projects, construction machinery manufacturers are required to participate, which is also an important driving force for China's construction machinery market to maintain sustained growth in the future." Su Zimeng said.
"At present, the excavator market is still in a rising period, with both stock renewal and incremental demand. It is foreseeable that in the first year of the "14th Five-Year Plan", China's construction machinery industry will continue to maintain a relatively high market prosperity, and the industry's growth pattern and The tone will not change, and it will continue to maintain steady growth," he said.
Su Zimeng said that in recent years, China's construction machinery industry has continuously achieved technological innovation and industrial upgrading, forming an organic complement to China's manufacturing service industry. With the continuous acceleration of the urbanization process, "machine substitution" has become a future trend. The application fields of construction machinery represented by excavators continue to expand, and the industry is facing good development opportunities.
For example, mini excavators with a tonnage of less than 6 tons are very popular in the domestic market, because they are good at working in narrow spaces, and their application areas have been extended to a large number of indoor operation scenarios and smart agriculture.
Accelerate to go international
While cultivating the domestic market, Chinese excavators have been seeking a stronger global influence.
According to data from the China Construction Machinery Industry Association, in the first quarter, the 26 excavator manufacturers included in the statistics exported a total of 13,376 excavators, a year-on-year increase of 81.9%.
Xugong Group Construction Machinery Co., Ltd., located in Xuzhou City, Jiangsu Province, is one of the Chinese machinery manufacturing giants. On April 2nd, at the launch ceremony of XCMG excavators exported to Europe, America and Australia in batches, more than 200 large, self-made excavators were launched and loaded onto the trucks, and they are about to go to Europe, the United States and Australia.
Despite the impact of the new crown pneumonia epidemic last year and the global economy facing severe recession pressure, XCMG excavator overseas sales continued to rise against the trend, especially in the first quarter of 2021, sales in high-end markets in Europe, America and Australia increased by nearly 50% year-on-year.
According to Wang Min, Chairman of XCMG Construction Machinery Co., Ltd., XCMG products are currently exported to 187 countries and regions, with an annual export volume of over 1.6 billion U.S. dollars. In recent years, the proportion of overseas revenue has basically stabilized at about 30%.
Su Zimeng said that some companies have realized the internationalization of R&D, production and brand and management systems, and their competitiveness in overseas markets has been improved by leaps and bounds. "In 2020, China's construction machinery exports are about 21 billion U.S. dollars. This is a very good performance under the influence of the new crown epidemic."
The global economy is also recovering. The "World Economic Outlook Report" predicts that the global economy will grow by 6% in 2021.
"Construction machinery is a key industry in international production capacity cooperation, and the road to internationalization that is steadily advancing will inevitably become wider and wider." Su Zimeng said.
