The sales of the world's largest construction machinery mainframe manufacturers reached a record high in 2019, but the industry is waiting for the actual impact of the new crown epidemic
The marketing of the world's top 50 mainframe manufacturers (Yellow Table ranking) has experienced a good growth in sales of construction machinery for several consecutive years after experiencing a decline from 2013 to 2016. Marketing in 2019 will go further on the premise of continuing this small trend. However, affected by the current global new epidemic situation, next year's ranking table can almost predict a decline in sales.
The total sales of the 50 companies on this year's list were $ 202.7 billion. This is a record number, and it is the first time that the total sales of Yellow Table have exceeded $ 200 billion.
This year's sales increased by 10% over the previous year, reaching almost US $ 203 billion. In 2018, the total sales of the top 50 mainframe manufacturers were US $ 184 billion.
Although the number in 2019 is a record high, it is worth mentioning that the percentage of growth has continued to slow. For example, in 2017, the Yellow Table increased by 25.5% compared to 2016, the growth in 2018 was 13.5%, and this year's growth slowed again to 10%.
The rate of continued slowdown will reappear next year, provided that the market has not shrunk and is in a "normal" environment. Due to the new crown epidemic, the main engine manufacturer's factory has been shut down and reduced production. The government requires the public to isolate. There is no doubt that sales will decline next year, but only how much. Caterpillar and Volvo Construction have announced their first quarter 2020 results: Caterpillar sales fell 27%, and Volvo Construction fell 17%.
Looking back at this year's ranking, Caterpillar maintained its top spot with sales of US $ 32.8 billion. Here is a statement about a small mistake: Caterpillar miners were not included last year, and their overall sales were underreported.
The second in the table is Komatsu, the company has maintained its stable non-surging growth. In any case, the ranking after the top two of these two historical lists has stirred more interest.
Last year John Deere leapt from 9th to 3rd place, an extremely bright fly-by. Although Deere's sales performed well, the main reason was due to the acquisition of the very successful company Wirtgen Group. John Deere kept his third place in this year's form, only a little bit closer.
Deere is only slightly ahead of Chinese company XCMG. XCMG jumped from sixth place last year to fourth place with its 11.1 billion US dollars in marketing revenue. It is followed by another Chinese company: Sany Heavy Industry, and its ranking has also been raised from seventh place to fifth place last year.
Several local Chinese manufacturers have significantly improved their rankings in the past few years. First, thanks to the “Belt and Road” national initiative, many companies are also aware that the services and after-sales services they provide need to be on par with Western companies, which is the reason for the success of European and North American companies in the market.
Volvo Construction Machinery's ranking slipped from fifth to sixth, and the company invested heavily in small electric drive equipment, which is a keen investment in the future. The second Japanese company ranked in the top ten: Hitachi Construction Machinery, ranked seventh and dropped three places. Followed by Liebherr, ranked eighth. Among the top ten in turn are Doosan Engineering Machinery, which ranks ninth; and a newly-ranked Chinese company: Zoomlion, whose revenue performance has been impressive, increasing from $ 4.3 billion to $ 6.2 billion .
The decline in sales in Asia, as shown in the table above-although weak-has dropped from 46.7% last year to 45.4%. In addition to the strong performance of several Chinese companies in the table, especially XCMG, Sany and China United, their rankings have all been improved. The North American market has gradually increased from 25% share to 27.8%, which relies on the strong marketing performance of Caterpillar, the world's largest OEM. The European market declined slightly, from 27.8% last year to 26.2%. There are two companies that represent the European sector and enter the top ten: Volvo Construction ranks sixth and Liebherr ranks eighth.
focus point
The most noteworthy part of the Yellow Table is China. There are currently two companies in this country that are in the top five of the list, and three companies are in the top ten of the list, and the performance in the top ten rankings is unparalleled.
China's construction machinery sales are still growing in 2019-although not as fast as in previous years-and at the same time, China's mainstream mainframe manufacturers are making further efforts to strengthen their overseas marketing. The sales revenue of the Chinese companies on the list reached almost 36 billion US dollars, accounting for 17.7% of the list. Last year, the contribution of Chinese companies was 16%.
It is worth mentioning that the current sales of construction machinery in China are still behind two other traditional heavyweight countries: they are the United States and Japan. It is worth noting how this situation changes in the next few years or even more than a decade.
The biggest change in the table for individual companies is four. The Japanese company Kubota rose from the 22nd place last year to the 18th place, and the German small equipment specialist Wacker Neuson rose from 28th place to 24th place. The Chinese company Longgong, the manufacturer of earth-moving machinery and road machinery, has created the largest decline, from 24th to 28th, just in reverse with Wacker Neuson.
There is only one new entrant in the table-to be more precise-reentrant: Turkish manufacturer Hidromek is again in the ranking table, ranking 50th. This is the second entry after experiencing last year's economic turmoil in Turkey and the collapse of the Turkish lira. The country has not yet fully recovered from the economic level, but the company is once again on the list.
Prospective to the future
Last year, when looking into the future, the analysis section mentioned political uncertainties, such as Brexit and the Trump administration. But those uncertainties are insignificant compared with the subsequent new crown epidemic.
Even if there is a forecast before the new crown epidemic-the sales of construction machinery have reached its peak, we will see a "soft" marketing market in 2020. The question now is: What will be the decline in marketing? The new crown epidemic is developing rapidly, and countries are at different stages in fighting the epidemic.
Steady growth: A recent construction machinery sales cycle is believed to have reached its peak in 2019 – this was before the new crown epidemic. The operating revenue of the top 50 mainframe manufacturers in the global construction machinery industry has grown well in the past few years – which is why 2019 is considered the culmination of a cycle. In 2016, the marketing revenue was 130 billion US dollars, and by 2019 this number will reach 2030 billion US dollars. Even in an industry with a significant cycle, marketing revenue has increased by $ 70 billion in three years. There are several reasons for this growth: large-scale government infrastructure projects; growing Chinese market and growing Chinese enterprises; equipment needs to be updated in a natural use cycle; the development of emerging markets and good equipment provided by mainframe manufacturers, Service and after sales. In summary, there will be a significant decline in the construction machinery market next year. The question is: what will happen next? At the same time, if the market rebounds, how much will it rebound?
In the second two quarters of 2020, I hope that life can return to a certain level of normality. Whether there will be a demand for "revenge" of construction machinery remains to be discussed, but it is likely that the sales of construction machinery will remain stagnant after the restart of life and operations. This greatly depends on government investment, because private equity financing looks mediocre.
Whether large-scale infrastructure projects are approved or unimaginably cancelled, will governments of all countries invest large-scale new infrastructure plans to stimulate the economy? The answers to the above questions will be sold in the Yellow Table next year The amount of attenuation is reflected in the amount.
Details
The ranking in the Yellow Table is based on sales calculated in US dollars in the 2019 natural year. Different currencies will be converted into US dollars based on the 2019 average exchange rate, to ensure maximum fairness. The data collection comes from a variety of sources including: listed company financial reports, company financial statements, and information about qualified third-party organizations.
In Japan, India and some other countries, the fiscal year ends on March 31, so it is almost impossible to use the statistical information of the natural year. In this case, the fiscal year's annual report will be used as the basis. In other cases, "International Construction" requires annual data and industry trends to estimate corporate performance. If it is necessary to estimate, these sales will be marked with two asterisks. We do our best to ensure the accuracy of this report.
